Economic and Labor Situation in Japan, June 2025

According to the finalized results of the Monthly Labour Survey for fiscal 2024 (covering establishments with five or more employees), released by the Ministry of Health, Labour and Welfare on the 22nd, real wages — which reflect price fluctuations in total cash earnings (nominal wages) — declined by 0.5% compared to the previous year, marking the third consecutive year of decrease. Despite historically high wage increases recorded in this year’s spring labor negotiations, wage growth continued to lag behind soaring prices.

Earlier this month, the government set a target to achieve a stable annual real wage increase of around 1% over the five years leading up to fiscal 2029. Although the rate of decline narrowed compared to the 2.2% drop in fiscal 2023, rising prices for essentials such as rice and daily necessities continued to squeeze household budgets.

Nominal wages for the last fiscal year, which include base salary and overtime pay, rose by an average of 3.0% per worker, marking the fourth consecutive year of increase. This significant growth, the highest in 33 years, reflects the outcomes of the spring labor negotiations and the hike in minimum wages. However, the consumer price index (excluding imputed rent for owner-occupied housing) remained high with a 3.5% increase, resulting in a net decline in real wages.

Real wages calculated based on the overall index that includes imputed rent, which the Ministry uses for international comparison, remained flat from the previous year at 0.0%. While real wages under international standards have emerged from negative territory for the first time in three years, they still remain at a lower level compared to countries like the United States and the United Kingdom, where real wages continue to grow.

Labour Force Survey Monthly Results¹

(1) The number of employed persons in April 2025 was 67.96 million, an increase of 460,000 over the same month the previous year. By gender, this included 36.97 million men, up 90,000, and 30.98 million women, up 360,000 from the previous year.

(2) Unemployment

The number of unemployed persons in April 2025 was 1.88 million, down 50,000 from the same month in the previous year.

The seasonally adjusted unemployment rate in April was 2.5%, unchanged from the same month the previous year. The unemployment rate was 2.7% for men, unchanged, and 2.3% for women, up 0.1 over the same month the previous year.

Units: 10,000 persons

(3) Job Availability

Japan’s job availability in April stood at 1.26, unchanged from the previous month. This ratio means there were 126 job openings for every 100 job seekers.

The ratio of regular employee job offers to applicants was 1.05, unchanged from the previous month.

The ratio of new job offers to applicants, a leading indicator for the labor market, was 2.24, down 0.08 from the previous month. The number of new job offers decreased 3.0% from the same month the previous year. By industry, the information and communications and accommodation and services increased 9.0% and 8.3% respectively.

The living-related and personal services and amusement services sector decreased 4.4%.

Industrial Production²

Industrial Production Fluctuates Indecisively

Industrial output in April decreased 0.9% from the previous month for the first decline in three months. Production and inventories decreased, while shipments and inventory ratio increased. The industries that mainly contributed to this decrease were as follows: (1) production machinery; (2) transport equipment (excl. motor vehicles); and (3) fabricated metals, in that order.

According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 9.0% in May and decrease 3.4% in June.

April  2025           2015 average = 100

Family Income and Expenditure Survey³

(1) Expenditure of Households of Two Persons or More

Average monthly consumption expenditure of households of two or more persons in April was 325,717 yen, up 4.0% in nominal terms but down 0.1% in real terms from the previous year.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 589,528 yen, up 4.1% in nominal terms but at the same level in real terms from the previous year. The average level of consumption expenditure was 363,182 yen per month, up 5.3% in nominal terms and up 1.2% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in April was 111.5 (2020 = 100), up 3.6% over the previous year and 0.1% over the previous month. Core inflation (CPI less food and energy) was up 3.0% over the previous year and up 0.2% over the previous month, driven by higher rice prices. The inflation rate has remained at or above the Bank of Japan’s 2% price stability target since April 2022.

Prices for rice, Japan’s staple food, still soared 98.6% over the previous year, the fastest pace since comparable data became available in 1971. As the government reinstated its subsidies to alleviate the burden of utility bills on households between January and April, energy prices were up 9.3% from a year earlier, accelerating from a 6.6% increase in March. Electricity prices rose 13.5% and prices for city gas grew 4.7%.

April 2025

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1. Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)
(https://www.stat.go.jp/english/data/roudou/results/month/index.html)

2. Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)
(https://www.meti.go.jp/english/statistics/tyo/iip/index.html)

3. Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)
(https://www.stat.go.jp/english/data/kakei/156.html)

4. Source: Consumer Price Index (Statistics Bureau of Japan)
(https HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html” HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html“://www.stat.go.jp/english/data/cpi/1581-z.html)