Japan December real wages after first increase in 9 months thanks to highest nominal growth in 26 years According to Reuters

TOKYO (Reuters) – Japan’s real wages rose in December for the first time since March despite rising inflation, as nominal wages rose at their fastest pace in nearly 26 years along with Powerful winter bonuses.

Markets are closely watching wage trends in the world’s third-largest economy as high wage growth to hedge against price increases is seen as an important condition for the Bank of Japan to scale back monetary easing. extremely loose.

Labor Department data showed that inflation-adjusted real wages, a measure of households’ purchasing power, rose 0.1 percent in December from a year earlier, marking an increase of 0.1% in December. first in 9 months.

Gross cash earnings, or nominal wages, rose 4.8% year-on-year in December, reaching the highest increase since January 1997 of 6.6%.

It matches the 4.8% growth in the consumer price index that the Department uses to calculate real wages, which includes fresh food but does not include the owner’s equivalent of rent. . The highest inflation rate since May 1981 was 5.1%.

Specialty payments rose 7.6% in December, after adjusting for 3.1% growth in the previous month. The index reflects seasonal bonus trends for winter from November to January and summer from June to August.

“Companies usually give out their biggest bonuses of the year in December, but this 7.6 per cent increase is significant” compared with previous years, a Labor Department official said.

Overtime wages, a measure of business strength, rose 3.0% year-on-year in December, led by double-digit gains for restaurant and service workers. other service.

It follows a revised 5.4% gain in November.

A workforce crisis in direct industries could be a factor behind the increase in compensation for service workers, the official said.

For the full year of 2022, Japan’s nominal wages grew 2.1%, the biggest annual increase since the 4.4% recorded in 1991. However, inflation was at its highest in four decades. caused real wage growth to fall negative, marking a 0.9% decline after a 0.6% decline. growth in 2021.

The table below shows preliminary data on monthly earnings and number of workers for December:

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Payment (amount) (year/year % change)

Total cash income 572,008 yen ($4,335.04) +4.8

-Monthly salary 269,740 yen +1.9

-Regular salary 250,083 yen +1.8

-Overtime pay 19,657 yen +3.0

-Special payment 302,268 yen +7.6

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Number of employees (million) (year/year % change)

Overall 51.812 +1.2

-Total employees 35,241 +1.0

-Part-time employee 16,570 +1.2

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The set defines “employees” as 1) people who have worked for more than a month at a company with more than five people, or 2) people who work by day or have a contract of less than one month but have worked more than 18 days in the two months before the survey was conducted, at a company with more than five people.

To see the full tables, see the website of the labor department at:

($1 = 131,9500 yen)