Wednesday, August 5, 2015

Japan's Real Wages Just Plunged The Most In Six Years.....ANOTHER PESKY FACT!

Japan's Real Wages Just Plunged The Most In Six Years

Japan's all important real wages, even those including bonuses and special payments, once again failed to keep up with inflation, and in June crashed by a whopping 2.9% reflecting a 0.5% yoy increase in the CPI excluding imputed rent. As the chart below shows, there has now been 24 consecutive months without a single Y/Y monthly increase in real wages. What's worse is that when one adjusts the inflationary surge from the consumption tax hike last April, which has now been fully anniversaried and is no longer part of the base effect, this was the largest decline in Japan's real wages since December 2009, or the biggest monthly plunge in 6 years!

The long decline in real wages, which has been on a general downtrend in the past four years, has hurt the average household income as the cost of living has been pushed up by high import costs and the sales tax hike last year.

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