Just a quick observation today as Japan released its October unemployment rate at 2.8%, way below supposed full employment. Yet it’s still waiting for wage inflation to kick in, for about twenty years now…
Japan is unique in some ways with its social contract between dead wood salarymen and other stabilising institutions, still as the leading indicator for our post-crisis developed economies it’s hardly irrelevant:
- balance sheet recessions and their aftermath take generations to restore animal spirits for debt;
- aging population;
- advancing automation.
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What it doesn’t have that other DMs do is inequality but that’s also a powerful deflationary force. Nor does it have a flood of cheap migrant labour which equally deflationary, especially when you’re already over-supplied.
Just sayin’, for all of you inflation hawks out there.
Looking at you, Bloxo, Boaky…
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