In Japan, Inflation-Adjusted Wages Decline for Second Consecutive Month

In Japan, inflation-adjusted wages decreased again in September following a decline in August. According to data from the Ministry of Labor, real wages fell by 0.1% in September, following a revised drop of 0.8% in August. Nominal wages, or average total cash earnings per worker, increased by 2.8% in September to reach 292,551 yen. The consumer price index used by the government to calculate real wages, which includes fresh food prices but excludes the equivalent rent for homeowners, slowed to 2.9% in September from 3.5% in August. An official from the Ministry of Labor stated, "Although the growth rate of total cash earnings remained unchanged, real wages declined, thus it is believed that this is due to the impact of rising prices." Wages are crucial for determining how soon the Bank of Japan may raise interest rates again. Base wages increased by 2.6% in September, indicating the fastest growth rate in nearly 32 years. Overtime pay, which serves as a barometer of corporate strength, dropped by 0.4% in September following a revised increase of 1.7% in August.