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No.243 (2017/8/7)
Economic and Labour Situation in Japan (August 2017)

2017 Spring Struggle
On July 5 RENGO (Japanese Trade Union Confederation) carried out its final tally of wage hike settlements reached in the 2017 Spring Struggle for a Better Life. RENGO's survey revealed that 5,416 unions that had demanded average wage hikes for members and engaged in labour-management negotiations had reached settlements by that time.

The average wage hike obtained by these unions was 5,712 yen (about $52), an increase of 1.98% over the average wage before the hike. Of these unions, 4,011 unions with under 300 members had reached settlements. The average wage hike achieved by these small and medium-sized unions was 4,490 yen (about $41), an increase of 1.87% over the average wage before the hike.

A total of 347 unions had reached settlements concerning hourly wage hikes for nonregular workers. The average settlement saw the hourly wage rise by 20 yen (about $0.18) to 965 yen (about $8.8).

Industrial Production
The industrial production preliminary report for June showed movement to be picking up. While production and shipments increased over the previous month, inventories and inventory ratio decreased.

With the robust growth in June, the industrial production index for the April-June quarter showed 1.9% quarter-on-quarter expansion. Industrial production and GDP are strongly correlated in Japan, and it is highly likely that the Japanese economy posted sixth consecutive quarterly growth in the April-June quarter.

2010 average=100
  Seasonally adjusted index Original index
  Index Change from
previous month (%)
Index Change from
previous year (%)
Production 101.4 1.6 105.5 4.9
Shipments 100.5 2.3 103.3 5.1
Inventories 108.9 –2.2 109.2 –3.1
Inventory ratio 110.1  –2.1 109.2 –4.5

Industries that mainly contributed to the increase were petroleum and coal products. Industries that mainly contributed to the decrease were as follows: (1) transport equipment, (2) chemicals (excluding drugs), and (3) electrical machinery, in that order.

According to the Survey of Production Forecast in Manufacturing, production was expected to increase by 0.8% in July and 3.6% in August.

Family Income and Expenditure Survey in July
(1) Expenditure for Two-or-More-Person Households

The average monthly consumption expenditure per two-or-more-person household in June was 268,802 yen, up 2.8% in nominal terms and 2.3% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 735,477 yen (include bonus payments), up 0.6% in nominal terms and 0.1% in real terms year-on-year. The average consumption expenditure was 296,653 yen, up 7.2% in nominal terms and 6.7% in real terms year-on-year.

Labour Force Survey Monthly Results

(1) Employment
The number of employed persons in June was 65.83 million, an increase of 610,000, or 0.9%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in June was 1.92 million, a decrease of 180,000, or 8.6%, from the same month in the previous year. The seasonally adjusted unemployment rate in June was 2.8%, down 0.3 point from the previous month. The unemployment rate for men was 2.9%, down 0.3 point, and for women 2.7%, down 0.2 point from the previous month.

(10,000 persons)
  June figures Change from previous year
      (%)
Population aged 15 years or over 11,108 –4 0.0
Labour force 6,775 42 0.6
Employed persons 6,583 61 0.9
Employees 5,848 87 1.5
Unemployed persons 192 –18 –8.6
Not in labour force 4,323 –51 –1.2
Labour force participation rate (%) 61.0 0.5 -
Employment rate (%) 59.3 0.7 -
Unemployment rate, original series (%) 2.8 –0.3 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 2.8 –0.3 -

(3) Job Availability
Japan's job availability in June was at the highest level since February 1974, with the ratio of job offers to jobseekers standing at 1.51, up 0.02 point over the previous month. This figure means that there were 151 jobs available for every 100 jobseekers. The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.25, down 0.06 point from the previous month but still very near the historical high registered in 1973. This figure shows that there are more than two new vacancies available for every new jobseeker. Japan has likely achieved full employment and faces a severe labour shortage.

Consumer Prices
The consumer price index in June was 100.2 (2015 = 100), up 0.4% over the same month of the previous year. The inflation rate continues to hover around zero and remains far below the 2% target set by the Bank of Japan. Despite the seemingly improving economic activities in Japan over the past six months, core inflation measures (CPI less food and energy) remain stubbornly close to zero.

June 2017
Index Annual
change (%)
Monthly
change (%)
All items 100.2 0.4 0.0
All items, less fresh food 100.2 0.4 0.0
All items, less food (less alcoholic beverages) and energy 100.7 0.0 0.0
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