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No.252 (2018/1/30)
Economic and Labour Situation in Japan (January 2018)

Prime Minister Abe Once Again Urges Business Leaders to Raise Wages by 3%

Attending a New Year's party organized by Japan's three major business organizations, Prime Minister Shinzo Abe urged business leaders to raise wages by 3% and called for aggressive investment to boost the country's economy and create a virtuous economic cycle. At a press conference following the gathering, Nippon Keidanren (Japan Business Federation) Chairman Sadayuki Sakakibara supported Prime Minister Abe's request for a 3% wage hike, saying that since profits at Japanese companies are extremely strong, wage hikes have become a social issue.

RENGO (Japanese Trade Union Confederation) has decided that trade unions should demand a wage hike of around 4% in the 2018 annual spring labour struggle for a better life, which kicks off in February.

Industrial Production
The industrial production preliminary report for November announced a moderate 0.6% rise over the previous month. 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

0.6 105.5 3.7
Shipments 101.3 2.4 103.1 2.4
Inventories 109.6 -1.0 112.2 2.8
Inventory ratio 110.9 -2.9 111.7 2.7

Industries that mainly contributed to the increase were as follows: (1) general-purpose, production, and business-oriented machinery, (2) electronics part and devices, and (3) petroleum and coal products, in that order. According to the Survey of Production Forecast, industrial production was expected to increase by 3.4% in December and decrease by 4.5% in January.

Family Income and Expenditure Survey in November
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in November was 277,361 yen, up 2.4% in nominal terms and 1.7% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 443,186 yen, up 2.5% in nominal terms and 1.8% in real terms year-on-year. The average consumption expenditure was 301,164 yen, up 2.4% in nominal terms and 1.7% in real terms year-on-year.

Labour Force Survey Monthly Results
(1) Employment
The number of employed persons in November was 65.52 million, an increase of 750,000, or 1.2%, over the same month in the previous year.

(2) Unemployment
The number of unemployed persons in November was 1.78 million, a decrease of 190,000, or 9.6%, from the same month in the previous year. The seasonally adjusted unemployment rate in November was 2.7%, down 0.1 point and remaining at the lowest level in 23 years. The unemployment rate for men was unchanged at 2.9% and for women 2.5%, down 0.1 point from the previous month.

(10,000 persons)
  November
figures
Change from previous year
      (%)
Population aged 15 years or over 11,113 -4 0.0
Labour force 6,730 56 1.2
Employed persons 6,552 75 0.9
Employees 5,865 86 1.5
Unemployed persons 178 -19 -9.6
Not in labour force 4,376 -59 -1.3
Labour force participation rate (%) 60.6 0.6 -
Employment rate (%) 59.0 0.8 -
Unemployment rate, original series (%) 2.6 -0.4 -
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 2.7 -0.1 -

(3) Job Availability
Japan's job availability in November was at the highest level since February 1974, with the ratio of job offers to jobseekers standing at 1.56, up 0.01 point over the previous month. This figure means that there were 156 jobs available for every 100 jobseekers. The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.37, up 0.01 point over 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 November was 100.9 (2015 = 100), up 0.6% over the same month of the previous year. The inflation rate continues to hover around zero and remains far below the 2% target by March 2019 set by the Bank of Japan. Despite the seemingly improving economic activities in Japan over the past 11 months, the core inflation index (CPI less food and energy) was up by only 0.3% year-on-year.

October 2017
Index Annual
change (%)
Monthly
change (%)
All items 100.9 0.6 0.7
All items, less fresh food 100.7 0.9 0.2
All items, less fresh food and energy 101.0 0.3 0.1
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