Japan's real wages rose for the first time in five months in January, the government said Tuesday, largely benefiting from a change in the way inflation was calculated in the survey compared to the previous month.
The wage report offers some relief for Prime Minister Fumio Kishida's government after a sharp rise in global energy costs and a recent surge in coronavirus infections posed headwinds to corporate and consumer activity in the country.
"I don't think that we can say wages have returned to pre-coronavirus levels," a labor ministry official said, adding that overtime pay would take longer to recover from declines seen since the onset of the pandemic, two years ago.
Inflation-adjusted real wages — a key gauge of households' purchasing power — rose 0.4% in January from a year earlier, the first rise in five months, labor ministry data showed.
The reading was mainly due to a change in the way the base year against which the consumer price index that the labor ministry uses to calculate real wages was estimated, the official said, which led to lower price pressures on real wages.
Nominal total-cash earnings rose 0.9% in January, returning to growth after slipping a revised 0.4% in the prior month. Regular pay was up 0.6%, the data showed. Overtime pay, a barometer of strength in corporate activity, gained 4.4% in January from the same period a year earlier, rising for the tenth straight month.
Special payments, which include the discretionary winter bonuses that firms slash when they face headwinds, jumped 7.6% in January after a revised 1.1% decline in December, also pushing up nominal wages.
Separate government data on Tuesday showed a service-sector sentiment index edged down 0.2 point in February on extended COVID-19 curbs and rising costs, following a double-digit fall in the previous month.
The Feb. 25 to Feb. 28 survey of workers such as taxi drivers and restaurant staff showed their outlook for the economy in the next 2 to 3 months improved for the first time in five months, as expectations of fewer COVID-19 cases outweighed fears that Russia's invasion of Ukraine would fuel a further surge in raw material and energy prices.
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