October 7, 2019 / 11:47 PM / 5 months ago

Japan's real wages drop for eighth straight month in August

TOKYO (Reuters) - Real wages in Japan adjusted for inflation fell for an eighth straight month in August, raising worries about the resilience in consumer spending after an increase in sales tax and weakening global demand.

FILE PHOTO: Office buildings are seen in the night at a business district in Tokyo, Japan, November 10, 2016. REUTERS/Kim Kyung-Hoon/File Photo

Real wages dipped 0.6% in August from a year earlier, labour ministry data showed on Tuesday, following a revised 1.7% annual drop in July.

Monthly wage data showed nominal total cash earnings fell 0.2% in August, down for a second straight month.

Regular pay, which accounts for the bulk of monthly wages, was up 0.3%, rising for a second month in a row.

One-off special payments declined 11.4% in August from a year earlier, after a revised 3.3% decline in July.

Overtime pay was up 0.9% in August from a year earlier, up for a second straight month.

Weak wages add to worries that Japan’s sales tax increase to 10% from 8% could cut into consumer spending. A previous tax increase in 2014 hurt sentiment and helped lead to an economic downturn.

Japan’s economy has slowed as the U.S.-China trade war and weak external demand hurt the export-reliant economy. The affect of the higher levy could slow the pace of recovery.

Revelations this year that labour ministry officials used faulty polling methods, which forced revisions, cast doubt on the accuracy of the ministry’s wage data from 2004 to 2017.

The error has made it harder to assess the actual status of wages.

Reporting by Kaori Kaneko, editing by Larry King

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