Economic and Labor Situation in Japan, July 2025

Final Tally of Wage Hike Settlements in 2025, Spring Struggle for a Better Life

On July 3, RENGO (Japanese Trade Union Confederation) carried out its final tally of wage hike settlements reached in the 2025, Spring Struggle for a Better Life. RENGO’s tally revealed that 5,162 unions that had demanded average wage hikes for members and engaged in labor–management negotiations had reached settlements by that time.

The average wage hike in these settlements (including the regular wage hike) was 16,356 yen, the equivalent of 5.25% of the average wage before the hike: more than at the same stage last year at 1,075 yen and 0.15 percentage points, marking the second consecutive year that the wage increase has exceeded 5%.

At unions with more than 1000 members, the average wage hike was 17,451 yen, up 5.39%: more than at the same stage last year at 1,089 yen and 0.15 percentage points.
Of unions with fewer than 300 members, the average wage hike was 12,361 yen, up 4.65%: more than at the same stage last year at 1,003 yen and 0.20 percentage points.
RENGO had set a target of over 5% wage increases overall, and over 6% for small and medium-sized enterprises (SMEs) in this year’s spring labor negotiations, although SMEs fell short of that goal.

At a press conference, Akira Nihira, Director of the Policy Promotion Bureau at RENGO, looked back and commented, “It is unfortunate that the wage increase rate for SMEs did not reach 5%. I believe the main reasons were the inability of some companies to sufficiently pass on costs through pricing and the slump in domestic demand due to high prices. We will continue to push for wage increases that allow more people to feel an improvement in their living standards.”

Labour Force Survey Monthly Results¹

(1) The number of employed persons in May 2025 was 68.38 million, an increase of 720,000 over the same month the previous year. By gender, this included 37.16 million men, up 230,000, and 31.22 million women, up 500,000 from the previous year.

(2) Unemployment

The number of unemployed persons in May 2025 was 1.83 million, down 100,000 from the same month in the previous year.

The seasonally adjusted unemployment rate in May was 2.5%, unchanged from the same month the previous year. The unemployment rate was 2.6% for men, down 0.1 and 2.3% for women, unchanged from the same month in the previous year.

Units: 10,000 persons

(3) Job Availability

Japan’s job availability in May stood at 1.24, down 0.02 points from the previous month, falling for the first time in three months. This ratio means there were 124 job openings for every 100 job seekers.

The ratio of regular employee job offers to applicants was 1.04, down 0.01 from the previous month.

The ratio of new job offers to applicants, a leading indicator for the labor market, was 2.14, down 0.10 from the previous month. The number of new job offers decreased 5.2% from the same month the previous year. By industry, the hotel and restaurant industry and wholesale and retail logging industry decreased 19.3% and 11.1%, respectively.

Transportation and postal services was the only sector that increased, by 0.1%, reflecting a chronic shortage of truck and other drivers.

Industrial Production²

Industrial Production Fluctuates Indecisively

Industrial output in May increased 0.5% over the previous month, marking the first increase in two months. Production and shipments increased, while  inventories and inventory ratio decreased. The industries that mainly contributed to this increase were as follows: (1) production machinery; (2) general-purpose and business oriented machinery; and (3) motor vehicles, in that order.

According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 0.3% in June and decrease 0.7% in July.

May  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 May was 316,085 yen, up 8.9% in nominal terms and up 4.7% in real terms from the previous year, marking the first rise in two months.Spending related to automobiles, including purchases and maintenance costs, increased by 46.8%, contributing significantly to the overall growth.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 522,318 yen, up 4.4% in nominal terms and up 0.4% in real terms from the previous year. The average level of consumption expenditure was 351,466 yen per month, up 10.3% in nominal terms and up 6.1% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in May was 111.8 (2020 = 100), up 3.5% over the previous year and 0.3% over the previous month. Core inflation (CPI less food and energy) was up 3.3% over the previous year and up 0.3% 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 May 2022.

Prices for rice, Japan’s staple food, still soared 101.0% 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 May, energy prices were up 8.1% from a year earlier, accelerating from a 6.6% increase in March. Electricity prices rose 11.3% and prices for city gas grew 6.3%.

May 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)