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.

INVESTOPEDIA EXPLAINS '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 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 >>
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. 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.
  6. Insurance

    Tips for Insuring Your Salary

    Those with high incomes really can’t afford to be without disability insurance. Here's why.
  7. Professionals

    How the Advisor Compensation Debate Helps Clients

    The debate over compensating advisors is not likely to be resolved anytime soon, but clients should win with lower fees and better services.
  8. Entrepreneurship

    Get the Best Freelance Rates for Your Work

    Smart strategies for estimating costs, researching fees, pricing projects and getting your rate for a range of clients.
  9. Investing

    What are Preference Shares?

    Preference shares, also referred to as preferred shares, are equity shares that give the shareholders certain rights ahead of common shareholders. For instance, when the corporation declares ...
  10. Retirement

    Pages From The Bad CEO Playbook

    Excess compensation, golden parachutes, tunneling and IPO spinning make these bad executives even worse.

You May Also Like

Hot Definitions
  1. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  2. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  4. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  5. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  6. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
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!