National Average Wage Index - NAWI

AAA

DEFINITION of 'National Average Wage Index - NAWI'

An index calculated annually by the Social Security Administration (SSA) based on wages subject to federal income taxes and contributions to deferred compensation plans. The National Average Wage Index (NAWI) is used by the SSA in the indexation of retirement and insurance benefits in the United States.

BREAKING DOWN 'National Average Wage Index - NAWI'

The national average wage is calculated by taking the previous year's amount and increasing it by the percentage increase in wages over the last year. This data provides investors with valuable information to let them know what the workers in the nation are making.

This statistics provides insight into the direction of wage trends, which can have an effect on wage inflation, which could cause the fed to raise rates to curtail it. Raising interest rates will have a negative effect on bond and equity markets. Alternatively, if wage inflation seems to be decreasing, the Fed may lower rates, which would have positive effects in the markets.

RELATED TERMS
  1. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  2. Sticky Wage Theory

    An economic hypothesis that the pay of employed workers tends ...
  3. Index

    A statistical measure of change in an economy or a securities ...
  4. Economic Growth Rate

    A measure of economic growth from one period to another in percentage ...
  5. Economic Growth

    An increase in the capacity of an economy to produce goods and ...
  6. Unemployment Rate

    The percentage of the total labor force that is unemployed but ...
Related Articles
  1. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  2. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  3. Active Trading

    Introduction To Stationary And Non-Stationary Processes

    What to know about stationary and non-stationary processes before you try to model or forecast.
  4. Retirement

    Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.
  5. Personal Finance

    How To Get That Entry-Level Financial Analyst Job

    Landing a job as a financial analyst takes study, strategy and a lot of hard work. Here's how to hone your competitive edge.
  6. Savings

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  7. Taxes

    Top Tips for Minimizing Taxes on Severance Pay

    A look at the top ways to lessen the tax burden on severance pay.
  8. Professionals

    8 Justifications For Sky-high CEO Salaries

    Why are CEO salaries so astronomically high? There may be more to the story than you think.
  9. Taxes

    Are You Paying Too Much in Taxes?

    Overpaying taxes amounts to an interest-free loan to the government. Here are some ways to avoid that scenario.
  10. Insurance

    Tips for Insuring Your Salary

    Those with high incomes really can’t afford to be without disability insurance. Here's why.
RELATED FAQS
  1. Are all disabilities treated the same for Substantial Gainful Activity (SGA) thresholds?

    Section 520 of the Social Security Act indicates that U.S. citizens are eligible to receive disability benefits if they are ... Read Full Answer >>
  2. How does the Social Security Administration determine the Substantial Gainful Activity ...

    A disabled individual is eligible to receive disability benefits from the Social Security Administration (SSA) if he earns ... Read Full Answer >>
  3. What is GDP and why is it so important to investors?

    The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents ... Read Full Answer >>
  4. Does my employer's matching contribution count towards the maximum I can contribute ...

    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
  5. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  6. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  2. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  3. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  4. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  5. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  6. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!