business

Japan real wages drop for 7th straight month in July

5 Comments

Real wages in Japan adjusted for inflation fell for a seventh month in July, adding to worries whether consumer spending can be sustained while the economy wrestles with slower global growth, labor ministry data showed on Friday

Real wages slumped 0.9% in July from a year earlier, after a 0.5% annual decline in June. Monthly wage data showed nominal total cash earnings dropped 0.3% in July, falling again after rising for the first time since last December the previous month.

Regular pay, which accounts for the bulk of monthly wages, gained 0.6% to rise for the first time since December. One-off special payments shed 2.2% in July from a year earlier, after a 1.1% gain in June. Overtime pay was 0.6% higher in July from a year earlier, rebounding after slipping 1.0% in June.

Revelations this year that labor ministry officials used faulty polling methods, which forced revisions, cast doubt on the accuracy of the ministry's wage data from 2004 to 2017. The mistake has made it more difficult to grasp the actual strength of wage growth.

Japan is planning to raise its sales tax to 10% from 8% next month. The last sales tax rise in April 2014 caused consumer sentiment to sour, leading to an economic downturn. Solid domestic consumption and capital spending have helped offset the drag on the world's third-largest economy from an eight-month export slump this year.

© (c) Copyright Thomson Reuters 2019.

©2019 GPlusMedia Inc.

5 Comments
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Thank Shinz, outstanding. Bet the Shinzos wage didn't shrink not an arrow for people just a dart for himself.

10 ( +10 / -0 )

The last sales tax rise in April 2014 caused consumer sentiment to sour, leading to an economic downturn

I think this one will be much worst. When consumer spending stagnated in 2014, the global economy was doing well. This time getting hit reduced consumer spending abroad with stagnant spending in Japan will be a disaster.

6 ( +6 / -0 )

Can someone say what or how much is the average salary. How much the drop is. Just so I can do my own calculations

4 ( +4 / -0 )

I am no math whiz, but I predict that if you have less money you cannot spend more.

4 ( +4 / -0 )

It’s gonna be a bleak winter....

1 ( +1 / -0 )

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