Japanese workers’ wages continue to increase at a slower pace than inflation, suggesting households hit by price gains will be more reluctant to spend going ahead.
Cash earnings added 1% from a year ago in May, the labor ministry reported Tuesday. Economists had predicted a 1.5% increase. Real wages adjusted for inflation fell 1.8%, declining the most since the early months of the pandemic.
The back-to-back drop in real wages shows households are seeing their spending power weaken as the cost of living rises faster than their paychecks. While that trend is much starker in other advanced economies, it’s starting to have political implications in the world’s third-largest economy.