Economics
Japan Consumer Spending Softens, Labor Market Remains Tight
- Unemployment ticks up but job-to-applicant ratio rises again
- Focus is on spring wage talks as consumers look for pay hikes
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A flurry of economic indicators on Tuesday showed that while Japan’s labor market is the tightest in decades, consumers remain cautious about spending until they see wages rise.
A sustained pickup in consumer spending is needed for Japan’s export-driven economic recovery to become more robust and self-sustainable. Solid economic growth and demographics mean the labor market will remain exceptionally tight. While wages and spending have improved, the kind of gains needed to drive inflation higher has eluded workers, with the focus of policy makers and analysts now on this year’s spring wage negotiations.