TOKYO (Reuters – Japan’s real incomes fell in September as inflation grew faster than the nominal growth rate, the government stated. It is a signal that Japan’s households are being affected by global cost-push inflation.

Japan’s Core Consumer Price Index (CPI), which saw 0.1% growth in September from one year ago, was the first positive number since March 2020. This is due to rising raw material and energy costs.

According to the Labour Ministry, inflation-adjusted nominal wages, an indicator of households’ purchasing ability, dropped 0.6% in September as compared with the previous year.

After a 0.1% increase in August that was downwardly revised, this is the first drop in three months. This could be attributed to rising consumer prices inflation.

CPI now uses by labour ministry for real wages calculation is not the same as one closely monitored by Bank of Japan. This is because the old index sets its base year at 2015 and not 2020.

CPI’s September version recorded 0.9% growth year-over-year, its fastest rate since December 2019.

For the seventh consecutive month, nominal cash earnings increased by 0.2% in September compared to a year ago. The increase was a result of a 0.6% decrease in August.

The data revealed that the average monthly salary (or base) which is the largest portion of cash earnings was 0.3% higher than the 0.5% increase in the preceding month.

Overtime pay is an indicator of the strength and stability in corporate activity. In September it grew 4.4% annually, which was a six-month-long gain but a slowdown from triple-digit growth in the three months between July and July. According to a government official, the slowdown is due to statistical effects that reflect smaller declines in the months towards 2020.

According to data, special payments which mostly consist of one-off bonuses and volatile ones fell by 2.3% in September compared with a year ago.

Here are preliminary numbers for September income and workers:

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Payments (amount) (yr/yr change %)

Cash earnings total 270,019 Yuen ($2,382.17) +0.2

Monthly Wage 263,276 Yuen +0.3

Payroll Regular 245,835 Yuen +0.1

-Overtime pay 17,441 yen +4.4

Special payments 6743 yen

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Number of workers in million (yr/yr% change).

Overall, 51.927 Mln +1.1

-General employees 35.710 mln +0.8

-Part-time employees 16.217 mln +1.7

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According to the ministry, “workers” are defined as: 1) people who worked for longer than one month in a company with more than five employees; or 2) people who had been employed daily or on less than a 1-month contract, but who had worked at least 18 days within the last two months at a firm that has more than five employees.

To view the full tables, see the labour ministry’s website at: http://www.mhlw.go.jp/english/database/db-l/index.html

($1 = 113.3500 yen)