Posted on July 30, 2021
Yesterday the Bureau of Economic Analysis (BEA) released its end-July annual revisions to the National Income and Product Accounts (NIPAs). The NIPAs consist largely of the many components of GDP, and every July BEA brings in new source data and revises a number of series going back at least three years, or sometimes further. The overall revisions this year were not very substantial, but one series we follow closely did change some: growth in economywide wages and salaries for 2020 was revised up from the prior-reported 0.7 percent to 1.3 percent. We had previously posted how the source data for NIPA wages and salaries, namely administrative data from the Quarterly Census of Employment and Wages (QCEW), suggested that NIPA wage and salary growth for 2020 would be revised up to 1.5 percent (see chart below). So, the actual revision came pretty close to what we expected. Alas, there’s no market for predicting NIPA revisions, but it does cement our view (that we’ve previously posted about) that the National Average Wage Index (AWI) for Social Security purposes rose in 2020, with a variety of implications for Social Security benefits. The Social Security Administration will report the AWI results for 2020 probably in October.
