Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090803g.jpg" align="left" border="0" height="265" width="353"></p>
<p>Cash earnings, including bonuses, for Japanese workers in all
establishments of 5 or more persons were 430,620 Yen (approximately
$4,500) in June, 8% below a year ago. The sharp decline was due to
lower bonuses and less overtime pay. The average bonus in June of this
year was 167,044 yen compared with 197,226 yen last June, a decline of
more than 15%. Overtime pay was 15,725 yen compared with 19,275 yen a
year ago, a decline of 18.42% and, although the decline was small, even
base pay declined 1.4% to 247,851 yen from 251,437 yen a year ago.</p>
<p>Cash earnings in the manufacturing industry in establishments
of 5 or more persons were down over 13% in June. Again, bonuses were
the major cause of the decline. Bonuses in Manufacturing were 155,298
yen in June 2009, compared with 209,309 yen in June 2008, a drop of
almost 40%. In contrast to industry as a whole, manufacturing saw an
increase in base pay of 1.5% and an increase of 5.7% in overtime from
May to June.</p>
<p>Total cash wages for all surveyed industries and for
manufacturing are shown in the attached chart.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Japan
Wages (Average monthly data in yen)</b></th>
<th scope="col"><u><b>Jun 09</b></u></th>
<th scope="col"><u><b>May&nbsp; 09</b></u></th>
<th scope="col"><u><b>Jun 08</b></u></th>
<th scope="col"><u><b>M/M %&nbsp;</b></u></th>
<th scope="col"><u><b>Y/Y %</b></u></th>
<th scope="col"><u><b>2008&nbsp;</b></u></th>
<th scope="col"><u><b>2007 </b></u></th>
<th scope="col"><u><b> 2006 </b></u></th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol" colspan="9">All
Industries</td>
</tr>
<tr class="odd">
<td class="firstcol">Schedule wages</td>
<td>247851</td>
<td>242451</td>
<td>251437</td>
<td>1.39</td>
<td>-1.43</td>
<td>251069</td>
<td>249749</td>
<td>252809</td>
</tr>
<tr class="odd">
<td class="firstcol">Overtime</td>
<td>15725</td>
<td>15940</td>
<td>19275</td>
<td>-1.35</td>
<td>-18.42</td>
<td>19147</td>
<td>19753</td>
<td>19805</td>
</tr>
<tr class="odd">
<td class="firstcol">Total=Contractual
Wages&nbsp;</td>
<td>263576</td>
<td>260391</td>
<td>270712</td>
<td>1.22</td>
<td>-2.64</td>
<td>270515</td>
<td>2695B02</td>
<td>272614</td>
</tr>
<tr class="odd">
<td class="firstcol">Bonuses</td>
<td>167044</td>
<td>7928</td>
<td>197226</td>
<td>n.m.</td>
<td>-15.30</td>
<td>60538</td>
<td>60396</td>
<td>62844</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Cash Wages</td>
<td>430620</td>
<td>268319</td>
<td>467938</td>
<td>n.m</td>
<td>-7.97</td>
<td>331053</td>
<td>329898</td>
<td>335438</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="9">Manufacturing</td>
</tr>
<tr class="odd">
<td class="firstcol">Schedule wages</td>
<td>267443</td>
<td>263356</td>
<td>269229</td>
<td>1.55</td>
<td>-0.66</td>
<td>267625</td>
<td>265482</td>
<td>271803</td>
</tr>
<tr class="odd">
<td class="firstcol">Overtime</td>
<td>19424</td>
<td>18351</td>
<td>31988</td>
<td>5.69</td>
<td>-39.28</td>
<td>30963</td>
<td>33025</td>
<td>34168</td>
</tr>
<tr class="odd">
<td class="firstcol">Total=Contractual
Wages&nbsp;</td>
<td>286867</td>
<td>281737</td>
<td>301217</td>
<td>1.82</td>
<td>-4.76</td>
<td>298588</td>
<td>298507</td>
<td>305972</td>
</tr>
<tr class="odd">
<td class="firstcol">Bonuses</td>
<td>155298</td>
<td>5836</td>
<td>209309</td>
<td>n.m.</td>
<td>-25.80</td>
<td>75644</td>
<td>75664</td>
<td>59515</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Cash Wages</td>
<td>442165</td>
<td>287573</td>
<td>510526</td>
<td>n.m.</td>
<td>-13.39</td>
<td>374231</td>
<td>374171</td>
<td>385487</td>
</tr>
<tr>
<td colspan="9" class="firstcol"><b>N.M.
presented in the table
is&nbsp; because of the distortions in the monthly data due to the
distribution of Bonuses in mid and end years, the month to month data
for bonuses and total cash wages are not meaningful</b></td>
</tr>
</tbody>
</table>
</body></html>

Cash earnings, including bonuses, for Japanese workers in all establishments of 5 or more persons were 430,620 Yen (approximately $4,500) in June, 8% below a year ago. The sharp decline was due to lower bonuses and less overtime pay. [...]

Japanese Wages Continue To Decline In June

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Winnie Tapasanun

250117R32.jpg

250117S32.jpg

Industrial production (IP) rose a larger-than-expected 0.9% m/m (0.5% y/y) in December following an upwardly revised 0.2% increase in November (-0.1% initially) and a downwardly revised 0.5% decline in October (-0.4% previously), data from the Federal Reserve Board showed. A 0.3% m/m December increase had been expected in the Action Economics Forecast Survey. The December IP index at 103.2 was the highest since June 2024; it was 4.2% above a low of 99.0 in September 2021 and 8.1% above a low of 95.5 in February 2021. The Fed estimated that increases in aircraft & parts output contributed 0.2 percentage point to December IP growth after the resolution of the Boeing strike. In Q4 2024, IP fell 0.2% q/q after falling 0.2% q/q in Q3 2024, dropping at a 0.6% annualized rate following a 0.8% Q3 annualized rate of decline. IP fell 0.3% in 2024 after rising 0.2% in 2023 and 3.4% in 2022.

By **industry groups**, manufacturing production gained 0.6% (0.03% y/y) in December following an upwardly revised 0.4% increase in November (+0.2% initially) and two consecutive m/m declines. Durable goods production rose 0.4% (-1.2% y/y) in December following a 0.9% rebound in November. This reflected m/m output rises of 6.3% (-5.6% y/y) in aerospace & miscellaneous transportation equipment, 1.7% (-1.9% y/y) in primary metals, 0.9% (-0.4% y/y) in fabricated metal products, and 0.5% (3.0% y/y) in electrical equipment, appliances & components. Notably, aircraft & parts production climbed 11.4% (-9.2% y/y), the largest m/m gain since May 2020, following a 0.7% November rebound. In contrast, the following durable goods categories fell m/m in December, including output drops of 2.0% (-3.7% y/y) in furniture & related products, 1.0% (-4.9% y/y) in miscellaneous durables goods, 0.7% (+3.8% y/y) in computer & electronic products, 0.6% (-5.7% y/y) in motor vehicles & parts, 0.6% (-1.3% y/y) in nonmetallic mineral products, 0.2% (+0.7% y/y) in machinery, and 0.2% (+2.7% y/y) in wood products.

Nondurable goods production rose 0.7% (1.4% y/y) in December after edging up 0.1% in November and October. The December rise reflected m/m output increases of all nondurable goods categories, including 1.6% (1.2% y/y) in petroleum & coal products, 1.5% (5.5% y/y) in printing & related support activities, 1.2% (-7.2% y/y) in apparel & leather goods, 0.8% (5.4% y/y) in chemicals, 0.6% (-1.0% y/y) in food, beverages & tobacco, 0.3% (1.3% y/y) in paper, 0.2% (-4.2% y/y) in plastics & rubber products, and 0.1% (2.3% y/y) in textiles & product mills.

Mining activity rose 1.8% (0.3% y/y) in December following an upwardly revised 0.5% decline in November (-0.9% initially). Utilities output rose 2.1% (4.3% y/y) following an upwardly revised 0.7% November drop (-1.3% initially). They increased for the second time in three months.

By **market groups**, business equipment output rose 1.4% (-4.3% y/y) in December following a 1.4% rise in November and two successive m/m decreases. Materials production advanced 1.2% (1.4% y/y) after virtually unchanged. Construction supplies production increased 0.9% (0.9% y/y) after holding steady. Consumer goods output rose 0.5% (0.3% y/y) in December after a 0.5% rebound, reflecting a 0.4% decline (-5.3% y/y) in durable consumer goods and a 0.7% gain (1.9% y/y) in nondurable consumer goods.

In **special classifications**, factory output of selected high-tech industries rose 1.1% (7.9% y/y) in December after holding steady in November (+0.3% initially) and four straight m/m rises. Manufacturing production excluding selected high-tech industries grew 0.6% (-0.2% y/y) following a 0.4% November rebound and two consecutive m/m declines. Manufacturing production excluding selected high-tech and motor vehicles & parts rose 0.7% (0.3% y/y) after a 0.2% November increase and three straight m/m decreases.

Capacity utilization rose to 77.6% in December, the highest since August, after holding at 77.0% in November (76.8% initially). The Action Economics Forecast Survey forecasted 77.0%. The December reading was 2.1 percentage points below its long-run (1972–2023) average. Manufacturing capacity utilization rose to 76.6% in December, the highest since September, from 76.2% in November (76.0% initially); the December rate was 1.7 percentage points below its long-run average.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

250117T32.jpg

250117U32.jpg

- Dec. IP +0.9% m/m (+0.5% y/y), up for the second straight month; IP Index at a 6-month high.
- Mfg. IP +0.6% m/m, w/ durable goods up 0.4% and nondurable goods up 0.7%.
- Mining activity +1.8% and utilities output +2.1%, up for the second month in three.
- Key categories in market groups all gain.
- Capacity utilization increases to a 4-month-high 77.6%.

U.S. Industrial Production Exceeds Expectations in December

250117F18.jpg

250117G18.jpg

Total housing starts jumped 15.8% m/m to a higher-than-expected 1.499 million units at a seasonally adjusted annual rate (SAAR) in December after declines of 3.7% to 1.294 million in November (-1.8% m/m, 1.289 million initially) and 0.8% to 1.344 million in October (-3.2% m/m, 1.312 million previously), data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected 1.320 million starts for December. The December reading was the first m/m rise since August and the highest level since February 2024. The year-on-year rate was at -4.4% in December, the smallest y/y decline since September and less severe than -14.3% in November; it was +17.0% y/y in December 2023. Starts were 18.0% below a recent peak of 1.828 million in April 2022. During all of 2024, housing starts fell 4.0% after falling 8.4% in 2023 and 3.3% in 2022.

Single-family starts rose 3.3% (-2.6% y/y) to 1.050 million in December on top of a 7.7% rise to 1.016 million in November (1.011 million initially), registering the fourth m/m rise in five months and the highest level since February 2024. They reached a high of 1.222 million in November 2021 and a high of 1.286 in December 2020. Multi-family starts surged 61.5% (-8.4% y/y) to 449,000, the highest level since December 2023, reversing a 30.7% November decrease to 278,000. They reached a high of 624,000 units in November 2022 and a high of 627,000 units in April 2022.

Housing starts gained in all the major regions except in the West. Starts in the Northeast jumped 40.2% (22.7% y/y) to a three-month-high 157,000 in December, the third m/m increase in four months, after a 2.8% rebound in November. Starts in the Midwest recovered 20.0% (1.0% y/y) to 204,000, up for the second month in three, following a 32.5% November slump. Starts in the South advanced 17.7% (0.1% y/y) to 853,000, the highest level since February 2024, following a 10.2% November rise and two consecutive m/m declines. To the downside, starts in the West fell 0.7% (-26.2% y/y) to 285,000 on top of an 11.7% decrease, registering the third m/m fall in four months and the lowest level since July 2024. Notably, the South continued to post the largest level figure (853,000) for housing starts among the four regions. It showed a peak of 1.048 million in April 2022.

Building permits slid 0.7% (-3.1% y/y) to 1.483 million in December, the third m/m slide in four months, following a 5.2% rise to 1.493 million in November (compared to 1.493 million recently revised on December 23 and 1.505 million initially reported on December 18). They reached a high of 1.915 million in January 2022 and a high of 1.883 million in January 2021. Single-family permits rose 1.6% (-2.5% y/y) to 992,000, the third straight m/m rise and the highest level since February 2024, after a 0.5% increase to 976,000. They reached a high of 1.251 million in January 2022 and a high of 1.250 in January 2021. Multi-family permits fell 5.0% (-4.3% y/y) to 491,000, down for the third month in four, after having recovered 15.4% to 517,000. They reached a peak of 813,000 units in February 2023 and a high of 799,000 units in June 2022.

The housing starts and permits figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

250117H18.jpg

250117I18.jpg

- Housing starts +15.8% (-4.4% y/y) to 1.499 mil. in Dec. vs. -3.7% (-14.3% y/y) to 1.294 mil. in Nov.
- Single-family starts highest since Feb. ’24; multi-family starts highest since Dec. ’23.
- Housing starts up m/m and y/y in the Northeast, Midwest and South but down in the West.
- Building permits fall for the third month in four, due to a drop in multi-family permits.

U.S. Housing Starts Rebound in December; Highest Level Since February 2024

Robert Brusca

250117E.jpg

U.K. sales volume for retail sales has been slipping roughly since mid-2024. The 3-month volume index is falling at a 4.4% annual rate over three months. Sales are up at a scant 0.2% annual rate over six months and by 3.5% year-over-year. Passenger car registrations show weakness falling at a 7.6% annual rate over three months, gaining at a 4.6% pave over six months, and then showing contraction at a minor -0.1% rate over 12 months.

**Volume Trends**
Apart from the sequential data, the monthly volume results show a decline in December, a gain in November and a drop in October. The monthly nominal data show small nominal gain in November and December against a sharper nominal decline in October.

U.K. nominal sales QTD relative nominal decline in the fourth quarter with retail sales volumes also show decline dropping at a 2.9% annual rate overall. Passenger car registrations are falling at a 12.4% annual rate in the fourth quarter.

**Surveys and Confidence**
U.K. surveys on retailing for the ‘time of year’ and the ‘volume of orders’ from the Confederation of British Industry (CBI) show sputtering monthly results. The CBI reading for time of year (TOY) and volume of orders (VoO) both show net decline of three months. VoO also falls over six months whereas TOY sales are higher over six months. Both TOY and VoO sales are higher over 12 months. TOY sales are up by 2-index points while VoO sales are up by 28 of their index points. While the year-on-year survey results show short-term agreement, their year-on-year signals seem different. But their long-term ranking results alone again show similarity at the TOY sales log a 21.8 percentile standing vs. VoO that is even weaker at a14-percentile mark. It is an even weaker full-sample standing despite the better 12-month gain. We often see this sort of thing in data comparisons. But if surveys are well-constructed, they usually track but there often are still disparities. That is true here as well and we can nit-pick the details but the overarching message here is that conditions are weak. Consumer confidence from GfK has been volatile over the span but when we rank the confidence index, it stands at 40.5 percentile level, which is stronger than for the surveys but still below its median and barely over half the standing of real retail sales growth.

**Rankings/Standings**
The consumer confidence standing is interesting at 40.5% but it is not ‘close’ to the volume ranking which is at its 77-percentile. The confidence ranking is still slightly below its median. The retail sales ranking is applied to real sales and their 12-month growth rate. The ranking of sales volume is much higher than any ranking registered by CBI surveys or by consumer confidence. Passenger car registrations are weak, too, at a 47.2 percentile standing. In contrast, nominal retail sales have a 60.6 percentile standing. Part of that is the boost they get from the 80.9 percentile standing from the CPI-H, from inflation.

250117.jpg

United Kingdom

U.K. Retail Sales Volumes Slide

Andrew Cates

**Global bond markets**
The sell-off in bond markets has been a global phenomenon. This is illustrated in chart 1 showing the movement in 10-year government bond yields in the US, UK and Germany over the past 12 months. Still, as the chart’s scaling indicates, divergences in yield levels between the US and UK versus Germany suggest different dynamics have been at play. The US and UK, for example, have been leading the sell-off compared with Germany (and other eurozone members).

250116Z1.jpg

**Global inflation expectations**
That suggests that inflation expectations coupled with inflation uncertainty have been a driver of higher yields. Chart 2 below shows the evolution of consensus forecasts for CPI inflation in 2025 across the US, UK, the euro area (and Japan) throughout 2024. Notably, expectations for inflation in the US and UK inflation rose steadily over the year. In contrast, euro area inflation forecasts remained relatively stable, hovering close to the ECB’s target of around 2%. We will focus more on this again below but for the record Japan’s inflation forecasts saw a gradual uptick, at the same time, but remained modest, increasing from 1.5% to just above 2%.

250116Z2.jpg

**Overseas demand**
The role of overseas demand for US government debt in driving US yields higher could also have been significant. Chart 3 below shows the evolution of foreign holdings of US Treasury securities from 2013 to 2024, segmented by key regions: Japan, China, Europe, and the rest of the world. Over the period, total foreign holdings steadily increased, surpassing $9 trillion by 2024. Notably, Japan has now emerged as the largest single holder of US Treasuries, with its share growing significantly, while China’s holdings, though substantial, have showed some decline in recent years. But a new US administration led by President-elect Trump could now be further disrupting this picture. A potential pivot toward more protectionist policies alongside some question marks about the independence of the Fed and the dollar’s role as the world’s reserve currency could be combining to undermine overseas demand for safe-haven assets in the United States.

250116Z3.jpg

**Japan**
Japan is worthy of some further separate comment in this regard. That’s because its capital flows are highly significant for global financial markets due to Japan's status as one of the world’s largest net creditor nations. Changes in Japanese capital flows—such as a shift back to domestic assets driven by rising yields or inflation expectations—usually create ripple effects, influencing global bond yields, currency markets (particularly the yen), and risk sentiment. This is why, notwithstanding relatively stable consensus inflation forecasts for 2025 that we noted above, the sharp rise in longer-term market-based inflation forecasts is noteworthy. Chart 5 below illustrates Haver’s calculations for the 5-year breakeven inflation rate in Japan from 2019 to 2024, and shows a sustained increase in those expectations in recent years. That follows several years of subdued expectations driven by entrenched deflationary pressures and weak demand. That the 5-year breakeven inflation rate crossed 2% toward the end of last year is also noteworthy given the Bank of Japan’s inflation objectives. For it potentially signals that monetary policy is still loose and that a further campaign to normalise policy beckons in the months ahead.

250116Z4.jpg

**Quantitative tightening** 
Central bank monetary policies more generally are also worthy of some discussion and particularly their balance sheet policies. Chart 5 below depicts the relationship between central banks' asset holdings as a percentage of GDP (a four-quarter change of an unweighted average for the US, Japan, and the euro area) and the real 10-Year bond yield in the US. The chart underscores the close connection between central bank asset purchases and real yields. In combination with looser US fiscal policy – and a higher degree of government bond issuance – the underlying supply and demand dynamics in the US Treasury market (and other government debt markets) have been shifting. Reduced demand from central banks, in other words, has coincided with additional supply from governments, and thereby amplifying upward pressure on real yields. 


250116Z5.jpg

**US and UK inflation**
The key takeaway from this discussion is that a confluence of factors has driven global yields higher in recent weeks. Inflation and monetary policy concerns, fiscal policy uncertainty, and shifts in capital flows have all likely contributed. As highlighted earlier, the trajectory of yields from here will hinge on incoming economic data and how policymakers respond. On that first point, however, it was notable that this week brought some encouraging news: the latest CPI inflation reports from both the US and UK came in weaker than expected. Notably, the details were also reassuring, with service-sector inflation showing further signs of moderation in both economies (see chart 6 below). This could ease some of the pressure on central banks to keep monetary policy restrictive in the period immediately ahead.

250116Z6.jpg

A steep sell-off in global bond markets has dominated financial headlines over the past week or so, drawing intense scrutiny from investors and policymakers alike (chart 1). The implications of this for the global economy, however, will depend on the underlying drivers that have been fuelling the rout. With our charts this week, we examine the data to identify some of the likely culprits. Inflation concerns are front and centre, with rising consumer prices in recent months (chart 2) reigniting fears of tighter monetary policy. Waning overseas demand, particularly from Japan and China (charts 3 and 4), may also be playing a significant role. Meanwhile, quantitative tightening (chart 5) has possibly siphoned liquidity from financial markets, while fiscal policy uncertainties are further rattling investor confidence. The easy conclusion is that all these factors—ranging from inflationary pressures to fiscal risks—are complicit to varying degrees. However, whether this marks the beginning of a broader reckoning or merely a passing squall hinges on how incoming data now evolve and how policymakers respond to these challenges. On that first point, weaker-than-expected inflation data from the US and UK this week appear to have stopped the rot for now (chart 6). On the latter, a new US administration could add another layer of unpredictability and the coming weeks could prove pivotal in shaping market expectations and the trajectory of the global economy.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/6C34mSDIvw6rPyTLMDSYso?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Japanese Wages Continue To Decline In June

Summary

Louise Curley

More Economy in Brief

U.S. Industrial Production Exceeds Expectations in December

U.S. Housing Starts Rebound in December; Highest Level Since February 2024

U.K. Retail Sales Volumes Slide

Charts of the Week: Yielding Conclusions

Japan Wages (Average monthly data in yen)	Jun 09	May 09	Jun 08	M/M %	Y/Y %	2008	2007	2006
All Industries
Schedule wages	247851	242451	251437	1.39	-1.43	251069	249749	252809
Overtime	15725	15940	19275	-1.35	-18.42	19147	19753	19805
Total=Contractual Wages	263576	260391	270712	1.22	-2.64	270515	2695B02	272614
Bonuses	167044	7928	197226	n.m.	-15.30	60538	60396	62844
Total Cash Wages	430620	268319	467938	n.m	-7.97	331053	329898	335438
Manufacturing
Schedule wages	267443	263356	269229	1.55	-0.66	267625	265482	271803
Overtime	19424	18351	31988	5.69	-39.28	30963	33025	34168
Total=Contractual Wages	286867	281737	301217	1.82	-4.76	298588	298507	305972
Bonuses	155298	5836	209309	n.m.	-25.80	75644	75664	59515
Total Cash Wages	442165	287573	510526	n.m.	-13.39	374231	374171	385487
N.M. presented in the table is because of the distortions in the monthly data due to the distribution of Bonuses in mid and end years, the month to month data for bonuses and total cash wages are not meaningful