Japan Oct real wages post biggest fall in 7 years with hot inflation
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TOKYO (Reuters) – Japan’s real wage posted its biggest fall in more than seven years in October on relentless consumer inflation even though nominal pay grew for a tenth month, official data showed on Tuesday.
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Falling real pay highlights households’ growing burden and policymakers’ conundrum in the wake of rare price hikes in Japan, while businesses are buckling up for annual labour talks next spring.
Inflation-adjusted real wages, a key indicator of consumers’ purchasing power, fell 2.6% in October from a year earlier, according to the labour ministry.
The real pay contraction was the sharpest since June 2015’s 2.8% decrease and followed a revised 1.2% dip in September.
The consumer price index the ministry uses to calculate real wages, which includes fresh foods but excludes owners’ equivalent rent, rose 4.4% in October from a year earlier, at the hottest pace since June 2014.
Although nominal total cash earnings rose 1.8% in October, price inflation pushed real wage growth into negative territory for the seventh consecutive month.
On the bright side, overtime pay, a gauge of business activity strength, rose 7.9% year-on-year in October, the largest gain in 15 months. Growing extra work hours in services industry drove up the figure, a health ministry official said.
Overtime pay among restaurants and bars jumped 52.2% in the 12 months to October, while other service sectors, from barbers to banks, also saw double-digit increases in overtime compensation.
Special payments grew 1.1% in October after a revised 20.2% surge in the previous month. The indicator tends to be highly volatile in months other than the June to August and November to January bonus seasons.
The following table shows preliminary data for monthly incomes and number of workers in October:
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Payments (amount) (yr/yr % change)
Total cash earnings 275,888 yen ($2,039.84) +1.8
-Monthly wage 269,603 yen +1.8
-Regular pay 250,081 yen +1.3
-Overtime pay 19,522 yen +7.9
-Special payments 6,285 yen +1.1
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Number of workers (million) (yr/yr % change)
Overall 51.660 +1.1
-General employees 35.313 +1.0
-Part-time employees 16.347 +1.3
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The ministry defines “workers” as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.
To view the full tables, see the labour ministry’s website at:
($1 = 135.2500 yen)
(Reporting by Kantaro Komiya; Editing by Toby Chopra)