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Economy in Brief

Employment in Japan Beginning to Show Improvement: Wage Growth Still Erratic 
by Louise Curley October 18, 2004

The improvement in economic activity in Japan is beginning to be seen in employment. Regular employment in all firms with 30 or more employees dipped slightly in August from July, but it was 0.21% over August of a year ago and was the fifth month to show a year over year increase. While employment in all industries excluding services has fared worse than the service sector, employment in these industries has also shown improvement in that the year over year percent changes are becoming less negative. The first chart shows the year over year percent changes in employment of firms with 30 or more employees in all industries and in all industries excluding services.

While employment shows a slightly improving trend, wages show no clear trend as can be seen in the second chart that shows the year over year changes in the nominal cash earnings of employees in those same firms that employ 30 or more employees.

Rising employment bodes well for household income, but the lackluster wage trend suggest caution in interpreting the labor statistics.

Index of Regular Employees in Firms with 30 or more employees (2000=100) Aug 04 Aug 04 Y/Y Jul 04 Y/Y Jun 04 Y/Y May 04 Y/Y Apr 04 Y/Y 2003   2002    2001 
All surveyed industries 96.8 0.21 0.31 0.21 0.21 0.21 96.3 97.6 99.0
All surveyed industries ex services 91.4 -0.87 -0.97 -0.97 -0.97 -1.08 92.2 94.6 97.5
                 
Index of Cash Earning-All surveyed industries (2000=100)                
  Real (SA) 96.7  0.94 -0.75 -2.94 -0.20 1.21 98.7 98.7 100.5
  Real (NSA) 82.1 0.86 -0.78 -3.00 0.25 1.26 98.7 98.7 100.5
  Nominal (NSA) 80.1 0.63 -0.97 -3.00 -0.26 0.64 96.3 96.4 99.3
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