A woman points to the high price of fruit at a market in Tokyo on March 3, 2023. Reuters/Androniki Christodoulou/File Photo Obtaining license rights
TOKYO, Nov 7 (Reuters) – Japan’s real wages fell for the 18th straight month in September, but personal consumption extended a multi-month decline, with rising prices weighing on household purchasing power and prompting calls from labor groups. Wage pressure may increase further. will increase.
Financial markets around the world are paying close attention to wage trends in the world’s third-largest economy. The Bank of Japan considers sustained wage increases as one of the preconditions for lifting ultra-easy monetary stimulus.
According to data from the Ministry of Health, Labor and Welfare, real wages after adjusting for inflation, a barometer of consumer purchasing power, fell by 2.4% in September compared to the same month last year, following a revised 2.8% decline in the previous month.
Consumer inflation, which authorities use to calculate real wages (includes the price of perishables but excludes owners’ equivalent rents), slowed to 3.6%, the lowest level since September last year. became.
Still, after being revised down by 0.8% in August, nominal wage growth in September was 1.2%, only slightly better than in July.
Major companies have agreed to raise wages by an average of 3.58% this year, the highest in 30 years. Average wages for Japanese workers have remained roughly flat since the bursting of the asset bubble in the early 1990s until this year.
Rengo, Japan’s largest labor organization, is expected to demand a wage increase of more than 5%, and UA Zensen, the largest industrial union, is expected to seek a 6% wage increase in negotiations early next year.
However, some economists are not optimistic about the prospects for a consumption recovery.
Shunsuke Kobayashi, chief economist at Mizuho Securities, said, “Nominal wage increases resulting from this year’s spring labor negotiations are usually reflected by the end of August, so there is no reason for them to go up from there.”
Kobayashi also said that even if wage increases were negotiated for next year, there was a risk that inflation would accelerate again unless the government extended current fuel and electricity subsidies.
Prime Minister Fumio Kishida’s government last week cut annual per capita income taxes by 40,000 yen ($267.58) and provided 70,000 yen to low-income households, totaling 17 trillion yen ($113.72 billion). economic stimulus package was formulated.
Special benefits decreased by 6% compared to the same month last year in September, after decreasing by 6.3% in August. This metric tends to fluctuate in months outside of the twice-yearly bonus season, November and January, and June to August.
According to the data, basic salary growth in September was 1.4% compared to the same month last year, up from the previous month’s revised 1.2% increase.
Overtime pay, an indicator of corporate activity, increased by 0.7% in September compared to the same month last year, after a 0.2% increase in August.
slump in spending
Separate data on Tuesday showed household spending fell 2.8% in September from the same month last year, the seventh consecutive month of decline. This was almost in line with the median market forecast of a 2.7% decline.
On a seasonally adjusted month-on-month basis, household spending rose 0.3% compared to an estimated 0.4% decline.
According to government officials, spending on things like eating out, transportation, and automobiles has increased due to an increase in going out, but spending on things like food, housing, furniture, and household goods has decreased due to rising prices.
Report by Satoshi Sugiyama; Edited by Robert Barthel and Sri Navaratnam
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