Back number

No.246 (2017/10/23)
Economic and Labour Situation in Japan (October 2017 )

Monthly Labour Survey Shows Unexpected Drop in Total Pay for Workers in July

Total cash earnings per worker in July, including base and overtime pay, dipped 0.6% from a year earlier to an average 370,823 yen ($3,310), the first fall in 14 months. Bonuses and allowances declined 3.1% to 109,189 yen for the first downturn in six months. In real terms, the wage index fell by 1.1% year-on-year, the worst decline since June 2015.

Given the 23-year-low unemployment rate of 2.8% and record corporate earnings, the wage decline was unexpected. But there was one patch of good news, although only for part-time workers: The hourly wages for part-time workers rose by 2.9% year-on-year in July, following a 3.0% rise in June, the highest since August 2008. Base wages for full-time workers have not risen more than 1% in any month over the last two years. Although part-time workers are seeing better per-hour pay, however, they are working fewer hours. Total hours worked, including overtime, slipped 0.4%, while the total number of workers grew 2.7%.

Cash Earnings in July

Establishments with five or more employees
Industries Total cash
earnings
 
Contractual
cash earnings
Special
cash earnings
  R.P.   R.P.   R.P.
  yen % yen % yen %
Industries covered 370,823 -0.6 261,634 0.5 109,189 -3.1
Mining and quarrying of stone and gravel 397,818 5.3 288,495 3.9 109,323 9.6
Construction 450,281 -1.7 329,335 1.6 120,946 -9.5
Manufacturing 530,683 0.7 306,075 0.6 224,608 0.9
Electricity, gas, heat supply, and water 496,196 0 433,255 -3.1 62,941 29.3
Information and communications 516,735 1.8 381,688 0.5 135,047 5.5
Transport and postal activities 402,915 0.8 291,768 0.9 111,147 0.3
Wholesale and retail trade 346,885 -1.8 228,610 1.6 118,275 -7.8
Finance and insurance 455,228 4.8 365,316 2.0 89,912 16.7
Real estate and goods rental and leasing 440,484 0.4 283,483 -2.7 157,001 6.6
Scientific research, professional and technical services 514,578 0.2 362,505 -0.8 152,073 2.3
Accommodations, eating and drinking services 135,940 -2.5 119,080 -1.3 16,860 -10.6
Living-related and personal services and amusement services 235,354 -0.1 188,384 1 46,970 -4.7
Education, learning support 345,789 1.7 293,748 0.3 52,041 11.4
Medical, health care, and welfare 333,215 0.4 254,219 1.6 78,996 -3
Compound services 418,048 -0.9 292,061 -2.8 125,987 4.2
Services, not elsewhere classified 280,311 -5.5 223,069 -0.9 57,242 -19.9

Note: R.P. means "ratio to the same month of the preceding year.

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

2010 average=100
  Seasonally adjusted index Original index
  Index Change from
previous month (%)
Index Change from
previous year (%)
Production 103.6 2.1 97.5 5.4
Shipments 101.8 1.7 94.9 5.8
Inventories 107.2 -0.6 111.0 -3.0
Inventory ratio 108.4 -4.3 119.1 -4.3

Industries that mainly contributed to the increase were as follows: (1) general-purpose, production, and business-oriented machinery, (2) transport equipment, and (3) electronic parts and devices, in that order.

According to the Survey of Production Forecast, industrial production was expected to decrease by 1.9% in September and increase by 3.5% in October.

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

The average monthly consumption expenditure per two-or-more-person household in August was 280,320 yen, up 1.4% in nominal terms and 0.6% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 485,099 yen, up 1.0% in nominal terms and 0.2% in real terms year-on-year. The average consumption expenditure was 301,574 yen, unchanged in nominal terms but down 0.8% in real terms year-on-year.

Labour Force Survey Monthly Results

(1) Employment
The number of employed persons in August was 65.73 million, an increase of 840,000, or 1.3%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in August was 1.89 million, a decrease of 230,000, or 10.8%, from the same month in the previous year. The seasonally adjusted unemployment rate in August was unchanged at 2.8%, remaining at the lowest rate in 23 years. The unemployment rate for men was 2.9%, down 0.2 point, and for women 2.5%, the same level as the previous month.

(10,000 persons)
  August figures Change from previous year
      (%)
Population aged 15 years or over 11,106 -4 0.0
Labour force 6,762 60 0.9
Employed persons 6,573 84 1.3
Employees 5,840 97 1.7
Unemployed persons 189 -23 -10.8
Not in labour force 4,338 -63 -1.4
Labour force participation rate (%) 60.9 0.5 -
Employment rate (%) 59.2 0.8 -
Unemployment rate, original series (%) 2.8 -0.4 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 2.8 0.0 -

(3) Job Availability
Japan's job availability in August was at the highest level since February 1974, with the ratio of job offers to jobseekers standing at 1.52, the same level as the previous month. This figure means that there were 152 jobs available for every 100 jobseekers.

The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.21, down 0.06 point from the previous month. 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 August was 100.3 (2015 = 100), up 0.7% 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 eight months, the core inflation index (CPI less food and energy) were up by only 0.2% year-on-year.

August 2017
Index Annual
change (%)
Monthly
change (%)
All items 100.3 0.7 0.2
All items, less fresh food 100.3 0.7 0.1
All items, less fresh food and energy 100.8 0.2 0.1
Copyright(C) JILAF All Rights Reserved.