MNI BRIEF: Japan August Real Wages Turn Negative
MNI (TOKYO) - Inflation-adjusted real wages, a barometer of household purchasing power, turned negative in August for the first time in three months, down 0.6% compared to July's 0.3% growth and June's 1.1% rise, preliminary data released by the Ministry of Health, Labour and Welfare on Tuesday showed.
Weak bonuses (+2.7% in Aug), compared to June and July's strong reads, drove the fall, the data showed.
Bank of Japan officials had largely anticipated the negative real-wage print, but they expect income conditions to improve, which will support consumption. (See MNI POLICY: BOJ Rate View Intact, Despite Dovish PM Remarks)
Total CPI minus imputed rents rose 3.5% y/y in August, accelerating from 3.2% in July, while scheduled earnings rose 3.0% y/y after rising 2.4% in July.
Total cash earnings, or nominal wages, posted a 3.0% year-on-year gain in August, slowing from 3.4% in July. Overtime pay rose 2.6% y/y after falling 0.2% in July.