JAPANESE wages fell in December for a ninth straight month, declining the most since June 2015, as employers remained fearful of the profit outlook amid a global resurgence of the coronavirus.

Labor cash earnings slid 3.2 percent from a year earlier, as year-end bonus payments plunged, labor ministry data showed yesterday. Economists previously predicted an overall 4.8 percent decline.

The country’s fourth-quarter GDP is likely to see a rebound given the recovery in exports and industrial production, but a decline in wages darkens the outlook for any sustained rebound in consumer spending. Private consumption accounts for more than half of the economy and is key to any recovery.

The pay declines come as services businesses that employ millions of workers grapple with another state of emergency. Last week Prime Minister Yoshihide Suga extended the emergency state for Tokyo and other major metropolitan areas to March 7, continuing a call for restaurants and bars to close by 8 p.m.

Household spending also dropped in December, falling for the first time in three months as people spent less on transportation and eating out amid a jump in domestic virus cases.

So far, Japan’s companies have fired fewer workers than in many other major economies, keeping unemployment at a low rate of 2.9 percent. Pay cuts have been part of the trade-off.

“We expect wages in Japan to weaken further in the first quarter. The early stage of spring wage negotiations doesn’t send a strong signal for pay rises. But the wage gap between manufacturers and non-manufacturers appears to have increased during the pandemic,” said Bloomberg economist Yuki Masujima.

Bonus payments fell 5.4 percent from the prior year. Adjusted for inflation, overall wages dropped 1.9 percent. Analysts had forecast a 3.4 percent decline.(SD-Agencies)