RTTNews - Total cash earnings of wage earners in Japan dropped at a faster pace in June, marking the the biggest yearly fall on record, a report by the Ministry of Health, Labor and Welfare showed Monday.
Total cash earnings of workers in establishments with five or more employees, dropped 7.1% year-on-year in June, faster than the revised 2.5% fall in the preceding month, and marked the 13th consecutive month of decline.
Special cash earnings or bonuses slipped 14.5% in June, after rising 4.3% in the preceding month. At the same time, overtime wages or non-scheduled wages continued to fall, the latest month seeing a 17.7% fall after a 17% fall in the preceding month. Overtime wages have been declining continuously since August last year.
Falling wages as well higher jobless rate have added strain to the weak economy. Additionally, deflationary pressures seem to have set in, with consumer and producer prices falling at record pace in June.
The latest data released from the Ministry of Internal Affairs and Communication showed that the jobless rate climbed further to 5.4% in June from 5.2% in the preceding month.
Consumer prices dropped for the fifth consecutive in June, dipping by 1.8% year-on-year and faster than the 1.1% drop in the preceding month. Core consumer prices, which exclude food prices, also fell at a record pace, declining by 1.7% in June after falling 1.1% in May. Month-on-month, overall consumer prices were down 0.2% in June, and core consumer prices also dropped at the same pace.
Producer prices, as measured by the corporate goods price index, fell 6.6% year-on-year in June, following a revised 5.5% drop in the preceding month. Prices fell for the sixth consecutive month in June.
However, there were signs of hope, as industrial output continued to rise for the fifth consecutive month in June. The country recorded a higher trade surplus in the same month.
Data from the Ministry of Trade, Economy and Industry revealed Friday that the industrial output rose a seasonally adjusted 2.4% month-on-month in June after a 5.7% growth in the preceding month. Manufacturing output, with the maximum weight in the index, grew 2.5% in June, after a 5.5% rise in the preceding month. However, on a yearly basis, industrial output was still down, falling 23.4%, slower than the 29.5% drop in May.
Improvement in the manufacturing sector was also reflected in the purchasing managers index, released by the Markit Economics Friday.
The seasonally adjusted headline Nomura/JMMA Purchasing Managers' Index or PMI rose to 50.4 in July from 48.2 in the previous month, the first improvement in 17 months. A PMI reading above 50 indicates expansion in the sector.
The country's Ministry of Finance also upgraded its economic assessment for the regional economy on July 29. This is the first time the ministry has raised its view in more than five years. Moreover, the Bank of Japan and the Cabinet Office also raised their assessment for the second consecutive month in June.
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