MNI BRIEF: Japan Oct Wages Rise; Real Pay Falls For 7th Month

Real wages remained in negative territory for a seventh consecutive month in October amid higher inflation, increasing concern about slower consumer spending in the coming months, according to data released Tuesday by the Ministry of Health, Labour and Welfare.

Average wages rose 1.3% y/y in October after rising 1.4% in September, with total monthly average cash earnings per regular employee increasing 1.8% y/y in October compared to 2.2% y/y growth in September.

However, real - or inflation adjusted - average wages posted a seventh straight drop, falling 2.6% y/y in October (vs. a 1.2% decline in September), indicating that households continued to be weighed down by rising living costs caused by high energy and food prices. Total CPI minus imputed rents rose 4.4% y/y in October, accelerating from 3.5% in September and August.

The weak real wages data indicated that households, especially low-income ones, are being hit more by the rise in food and durable goods prices caused by the rising resource prices and the yen’s fall.