Average monthly real wages dropped 3.8% in November amid higher food and energy prices, marking the sharpest fall in eight and a half years as well as the eighth straight month of decline, according to figures released by the Ministry of Health, Labour, and Welfare on Jan 5.
Speaking at a press conference on Jan 4, Japanese Prime Minister Fumio Kishida emphasized the need to do everything possible in order to increase wages and reach sustained economic growth. Kishida also stated that for the past 30 years, wages have not grown despite rises in corporate profits, adding that wages should exceed the rate of inflation.
Real wage rises are expected to be the main focus of the nation’s upcoming annual “Shunto” spring labour struggle between management and labor.

Labour Force Survey Monthly Results¹

(1) Employment

The number of employed persons in November 2022 was 67.24 million, an increase of 28,000 over the same month the previous year. By gender, this included 36.83 million men, down 20,000, and 30.41 million women, up 48,000 from the previous year, respectively.

(2) Unemployment

The number of unemployed persons in November 2022 was 1.65 million, a decrease of 18,000 from the same month in the previous year, for the fourteenth straight monthly decline. The seasonally adjusted unemployment rate in November was 2.5%, down 0.1% from the previous month. The unemployment rate for men was 2.8%, unchanged from the previous month, and 2.2% for women, down 0.1% from the previous month.

(3) Job Availability

Japan’s job availability in November stood at 1.35, unchanged from the previous month, ending 10 straight months of improvement, meaning there were 135 job openings for every 100 job seekers. The ratio of regular employee job offers to applicants was 1.04, up 0.01 point over the previous month. The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.42, up 0.09 over the previous month. The number of job offers in the accommodation and food service sectors climbed 21.2% over the same month in the previous year, followed by an 13.0% increase in the wholesale and retail sector.

Industrial Production ²

Japan’s industrial output in November decreased 1% from the previous month, for the third straight month of decline, mainly due to weak overseas and domestic demand.
While production and shipments decreased, inventories and inventory ratio increased.
The industries that mainly contributed to the decrease were as follows: (1) general-purpose and business-oriented machinery; (2) production machinery; and (3) chemicals (excl. inorganic, organic chemicals, and medicines), in that order.
According to the Survey of Production Forecasts in Manufacturing, production was expected to increase by 2.8% in December and decrease by 0.6% in January.

Family Income and Expenditure Survey ³

(1) Expenditure of Households of Two Persons or More

Average monthly consumption expenditure of households of two or more persons in November was 285,947 yen, up 3.2% in nominal terms but down 1.2% in real terms from the previous year, marking the first decline in six months as warmer temperatures dented demand for winter-related clothing and goods. By component, spending on fuel, lighting, and water utility charges rose 12.3% and housing rose 22.1% but clothing and footwear dropped 6.9% in nominal terms from a year earlier.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 502,259 yen, up 4.2% in nominal terms but down 0.3% in real terms from the previous year. The average level of consumption expenditure was 308,122 yen per month, up 1.3% in nominal terms but down 3.1% in real terms year-on-year.

Consumer Prices ⁴
Consumer prices rise 3.8%, highest since 1981

The consumer price index (CPI) in November was 103.9 (2020 = 100), up 3.8% over the previous year and up 0.3% over the previous month, driven by higher commodity prices and a weak yen. Core inflation (CPI less food and energy) was up 2.8% over the previous year, marking the eighth straight month of increase. Energy prices surged 13.3% from a year earlier. City gas and electricity bills saw marked gains of 28.9% and 20.1%, respectively. Food prices, excluding fresh food items, rose 6.8%, marking the sharpest rise since February 1981.

1. Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/roudou/results/month/index.html)
2. Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)
   (https://www.meti.go.jp/english/statistics/tyo/iip/index.html)
3. Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/kakei/156.html)
4. Source: Consumer Price Index (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/cpi/1581-z.html)