(MENAFN) Japan’s real wages in May dropped 2.9 percent compared to the previous year—the steepest decline since September 2023—as inflation persistently outstripped wage increases, government figures revealed Monday.

The Ministry of Health, Labor and Welfare reported that inflation-adjusted real wages, a key measure of household purchasing power, contracted for the fifth month in a row following a revised 2.0 percent decline in April.

Meanwhile, nominal wages—representing total average monthly cash earnings including base pay and overtime—inched up 1.0 percent to 300,141 yen (approximately 2,073 U.S. dollars). This marked the 41st consecutive month of nominal growth but showed a slowdown from April’s revised 2.0 percent increase.

A ministry official explained that the downward pressure on average wages stemmed mainly from a steep 18.7 percent fall in special payments like bonuses and transportation allowances, which slid to 12,595 yen. The official attributed this drop to a sharp reduction in bonuses as fewer employers issued them in May.

Meanwhile, consumer inflation surged 4.0 percent year-on-year in May, propelled by rising costs for rice and other food items, maintaining real wages firmly in negative territory.

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