Japanese wages rose more than expected in November, offering hope of stronger consumer spending that could fuel inflation if gains are sustained.
Overall labor cash earnings increased 2 percent from a year ago, compared with a 1.5 percent gain in October. The gain was the fourth increase of at least 2 percent in the last nine months.
Prime Minister Shinzo Abe has repeatedly called on companies to make bigger pay increases to help achieve a cycle of stronger consumption and inflation that government and Bank of Japan policy makers believe is needed to achieve stable price growth.
Driven by the tightest labor market in decades, wages in Japan have grown moderately since mid-2017, but not consistently at the pace needed to push inflation to the BOJ’s target of 2 percent.
November’s surprisingly strong data suggests companies are having to raise pay to attract workers despite their reluctance to boost wages amid trade tensions, a slowdown in China and other economic uncertainties. Still, the sustainability of the latest gains remains in doubt.
The labor ministry said it is currently exploring why recent wage data on businesses with over 500 employees has been based on a sample rather than a comprehensive survey.
Real wages, which are adjusted for inflation, increased 1.1 percent (forecast +0.4 percent), following a 0.1 percent decline the previous month.