Economic and Labor Situation in Japan, March 2025

On March 6, Rengo (Japanese Trade Union Confederation) announced that the average wage increase rate requested by its affiliated labor unions in the 2025 spring labor–management negotiations was 6.09%. This marks the first time in 32 years, since 1993, that the request has exceeded 6%. The average requested wage increase amount was 19,244 yen, an increase of 1,638 yen compared to the same period last year.

This level surpasses the 5.85% requested in 2024, which was the highest in 30 years. Wage increases consist of base pay raises (base-up, or “BEA”) and regular pay raises. Among 2,454 unions where the base-up portion was clearly identified, the requested base-up rate was 4.51%.

For small and medium-sized enterprises (SMEs), the requested wage increase rate was 6.57%, exceeding the 5.97% requested in 2024. Rengo has set a goal of a wage increase of 6% or more to bridge the gap with large companies, surpassing the overall average of over 5%.

Labour Force Survey Monthly Results¹

(1) The number of employed persons in January 2025 was 67.79 million, an increase of 650,000 over the same month the previous year. By gender, this included 36.87 million men, up 50,000, and 30.92 million women, up 600,000 from the previous year.

(2) Unemployment

The number of unemployed persons in January 2025 was 1.63 million, unchanged from the same month in the previous year.

The seasonally adjusted unemployment rate in January was 2.5%, unchanged from the same month the previous year. The unemployment rate was 2.6% for men, up 0.1, and 2.3% for women, down 0.2 from the same month the previous year.

Units: 10,000 persons

(3) Job Availability

Japan’s job availability in January stood at 1.26, unchanged from the previous month. This ratio means there were 126 job openings for every 100 job seekers.

The ratio of regular employee job offers to applicants was 1.03, unchanged from the previous month.

The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.32, up 0.05 over the previous month. The number of new job offers decreased 0.4% from the same month the previous year.

Industrial Production²

Industrial Production Fluctuates Indecisively

Industrial output in January decreased 1.1% over the previous month. Production and shipments decreased, while inventory ratio and inventories increased. The industries that mainly contributed to this increase were as follows: (1) production machinery; (2) electronic parts and devices; and (3) electrical machinery, and information and communication electronics equipment, in that order.

According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 5.0% in February and decrease 2.0% in March.

January 2025           2015 average = 100

Family Income and Expenditure Survey³

(1) Expenditure of Households of Two Persons or More

Average monthly consumption expenditure of households of two or more persons in January was 305,521 yen, up 5.5% in nominal terms and up 0.8% in real terms from the previous year.

(2) Income and Expenditures for Workers’ Households

Average monthly income per household stood at 514,877 yen, up 3.5% in nominal terms but down 1.1% in real terms from the previous year. The average level of consumption expenditure was 331,341 yen per month, up 5.8% in nominal terms and up 1.1% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in January was 111.2 (2020 = 100), up 4.0% over the previous year and up 0.5% over the previous month. Core inflation (CPI less food and energy) was up 2.5% over the previous year and up 0.3% over the previous month, the fastest pace in 19 months, due to higher rice and energy costs.

Prices for rice, Japan’s staple food, still soared 71.8% over the previous year, the biggest increase since comparable data became available in 1971, due to a supply shortage, and higher production and transportation costs. As the government terminated its subsidies that had alleviated the burden of utility bills on households in the reporting month, energy prices climbed 10.8%. Electricity prices surged 18.0% and city gas prices jumped 9.6%.

January 2025

1. 1. Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)
   (https://www.stat.go.jp/english/data/roudou/results/month/index.html)
2. 2. Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)
   (https://www.meti.go.jp/english/statistics/tyo/iip/index.html)
3. 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. 4. Source: Consumer Price Index (Statistics Bureau of Japan)
   (https HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html” HYPERLINK “https://www.stat.go.jp/english/data/cpi/1581-z.html“://www.stat.go.jp/english/data/cpi/1581-z.html)