TOKYO – Japan’s real wages in November fell 2.8 percent from a year earlier, marking the 11th consecutive month of decline and the sharpest drop since last January, as pay growth continued to lag behind rising prices, government data showed Thursday.
Inflation-adjusted wages dropped as a 3.3 percent rise in consumer prices more than offset a 0.5 percent increase in nominal wages to 310,202 yen ($1,980), the Ministry of Health, Labor and Welfare said.
Food and energy prices have remained elevated, keeping real wages — a key gauge of consumer purchasing power — in negative territory for nearly a year, even as nominal wages have grown for 47 straight months.
Nominal wage growth slowed from a revised 2.5 percent rise in October, dragged down by a 17.0 percent drop in special earnings, which a ministry official described as a “volatile component.”
The Bank of Japan will be closely watching this spring’s wage negotiations as a key indicator for deciding the pace of future interest rate increases, after implementing a hike to a 30-year high last month.
The official did not provide an assessment of the outlook for real wages, saying December data would better reflect winter bonuses.
In 2024, real wages posted year-on-year increases in June, July, November and December, when summer and winter bonuses are typically paid.