August 4, 2017 / 12:01 AM / 8 months ago

Japan June nominal and real pay fall y/y, a blow to consumption

    TOKYO, Aug 4 (Reuters) - Basic compensation for Japan's
workers fell for the first time in more than a year in June due
to a decline in summer bonus payments, and real wages dropped at
the fastest pace in two years, threatening a recent revival in
consumer spending.
    Wage earners' nominal cash earnings fell an annual 0.4
percent in June, the first decline since May 2016, labour
ministry data showed on Friday.
    Base compensation, which accounts for the bulk of total
nominal cash earnings, rose 0.4 percent in June from a year
earlier, slower than a revised 0.5 percent annual increase in
the previous month. 
    Real, or inflation-adjusted, wages fell an annual 0.8
percent in June, the biggest decline since June 2015. Further
declines in real wages would be a blow to hopes that consumer
spending is strong enough to generate sustained inflation.
    Overtime pay, a barometer of strength in corporate activity,
fell 0.2 percent in June from a year earlier versus a revised
0.3 percent year-on-year increase in May.
    Special payments, such as bonuses, fell 1.5 percent in June
from a year ago, the first decline since January as some
companies reduced the amount of bonus payments to their workers.
    The following table shows preliminary data for monthly
incomes and numbers of workers in June: 
   Payments               (amount)     (yr/yr pct change)
 Total cash earnings   429,686 yen      -0.4
 -Monthly wage         261,583 yen      +0.4
  -Regular pay         242,582 yen      +0.4
  -Overtime pay         19,001 yen      -0.2
 -Special payments     168,103 yen      -1.5
 Number of workers      (million)    (yr/yr pct change)
 Overall                50.221 mln      +2.6
 -General employees     34.852 mln      +2.6
 -Part-time employees   15.369 mln      +2.8
    The ministry defines "workers" as 1) those who are employed
for more than one month at a firm that employs more than five
people, or 2) those who are employed on a daily basis or have
less than a one-month contract but had worked more than 18 days
during the two months before the survey was conducted at a firm
that employs more than five people.
    To view the full tables, see the labour ministry's website
at:  here

 (Reporting by Stanley White; Editing by Richard Borsuk)
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