EPI has long documented wage trends. We have tracked real (inflation-adjusted) wage growth over the last month, over this business cycle, over the last 35 years, and over the last 60 years. What we measure when we look at real wages is how well workers and their families are doing—whether their wages are keeping up with inflation and whether the vast majority of Americans are seeing any increase in their standards of living. And, we’ve also proposed ways to Raise America’s Pay.

But wages can provide information on issues besides just the state of American living standards. They can also be a key indicator of macroeconomic health. One example is the degree to which wage growth puts upward pressure on prices. The Federal Reserve’s mandate is to balance the benefits of low unemployment versus the benefits of keeping inflation stable. One sign of growing inflationary pressure is when nominal (not real) wages are rising significantly faster than the Fed’s target rate of inflation (currently 2 percent, which is not set in stone but which is widely acknowledged to be what the Fed is aiming for) plus productivity growth (between 1.5 to 2 percent). The fact is that nominal wages have been growing far slower than any reasonable wage target for the last five years.

Tomorrow, we are unveiling our new Nominal Wage Tracker, which will host the most up-to-date information on nominal wages, released every month with the Bureau of Labor Statistics’ Employment Report. We will explain how slow wage growth continues to be a key signal of how far the U.S. economy is from a full recovery. In addition, we will track the cumulative effect of the ongoing failure of wages to hit target levels, and how this relates to labor’s share of corporate income.

Given this, the Nominal Wage Tracker will be a key tool to analyze whether the Federal Reserve should take action in the near-term to slow the economy. So far the wage tracker data shows that we are far from a full recovery. And, sluggish nominal wage growth is a key sign that there’s still too much slack remaining in the labor market.