World News

Japan’s real wages rise in February for second straight month

TOKYO (Reuters) – Japan’s inflation-adjusted real wages rose for a second straight month in February, official data showed on Tuesday, in a sign of relief for an economy under threat of a deep downturn over the coronavirus pandemic.

The world’s third-largest economy is expected to have slipped into recession – marked by two quarters of negative growth – in the March quarter as the coronavirus hit demand, led to travel bans and disrupted supply chains.

Real wages, a gauge of household purchasing power, gained 0.5% in February from a year earlier, labour ministry data showed, following a downwardly revised 0.4% rise in the previous month.

Japanese Prime Minister Shinzo Abe on Monday said the government would launch a stimulus package of around 108 trillion yen. It was not immediately clear how much of that package would be new government spending.

The monthly wage data showed nominal total cash earnings rose 1.0% in the year to February after a revised 1.2% gain in January.

One-off special payments were up 21.5% in February after a downwardly revised 9.5% gain in January. Regular pay – or base salary, which makes up most of total cash earnings and determines a wage trend – grew 0.7%, the data showed.

Overtime pay, a barometer of strength in corporate activity, dropped 1.2% in February from a year earlier, down for a sixth straight month.

Revelations last year that labour ministry officials used faulty polling methods cast doubt on the accuracy of the ministry’s wage data from 2004 to 2017. The flaw has made it harder to gauge the actual wage trend.

(Reporting by Daniel Leussink, editing by Larry King)