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Japan Admits Fabricating 2014 Wage Growth Data

Several days ago, when we learned that the Japanese Labor Ministry was inexplicably delaying its wage data, we had a prompt, if sarcastic response: we immediately assumed there was an error in the Japanese fudging of this all important to the success of Abenomics data series.



— zerohedge (@zerohedge)

Well, in addition to "prompt" and "sarcastic" we can also add "accurate", because in this bizarro world that has long since made The Onion obsolete, snark has proven to be reality once more, and following a several day delay in which the data "revision" was marinated, aka spent unfabricating fabrciated data, the Labor ministry finally released the delayed numbers (we won't call it "data" for the simple reason that it clearly is just goalseeked jibberish to be shortly revised lower yet again). 


We can only hope that it will come as no surprise to our readers that following the "revision", Japan revealed that in 2014 there were no months with any basic wage growth.

None. Zero.

Which is surprising because based on the pre-revision "data", Japan supposedly had exactly 6 months of positive Y/Y basic wage growth, which the media was hailing with every passing month, as proof that Abenomics was indeed working, and providing this fabricated data as validation of Japan's idiotic, and terminal, experiment in 100% debt monetization, and currency and stock market manipulation and soon, devastation.

Yet, in "revised" reality as noted above, Japan had exactly zero months of basic wage growth in all of 2014.


Incidentally, it's not just Zero Hedge's take on the revised "data" - here is Goldman.

Downward wage after close re-examination of data; 2014 basic wages shrink: The Japanese government delayed the announcement of February wage data from the scheduled release date of March 31, after it found data that required re-examination in the process of replacing businesses in the data sample. Wage data as a whole was revised down historically as a result. For CY2014, total cash wage growth was lowered 0.4 pp to +0.4% yoy, from +0.8% pre-revision, while October and November 2014 total cash wages came in negative (at -0.1% and -0.2%, respectively; wages also shrank on a nominal basis). Basic wages remained negative yoy through December 2014 even after last spring’s shunto wage hike, before finally moving into positive territory in January 2015 (+0.2%).

Actually, we will reserve judgment on said January increase in basic wages until after the next revision which will certainly push the January "rebound" into negative territory yet again.

Furthermore, let's not forget that for all the shock that comes from the discovery that a government was fabricating data for months on end, the reality is that none of this actually matters in the grand scheme of things: because while we are splitting hairs on a nominal basis, on a real, inflation-adjusted basis, courtesy of the import cost inflation the Abe has unleashed in his country, wages tumbled by 2.0% for yet another month. In fact, as the chart below shows, the past 20 months are the longest period in Japanese history without a single month of real wage growth!


But... but... the WSJ said...

Oh really, could we get some names of the "economists" who predicted the "trend will continue" - the trend, which following the wholesale revision, never existed and base wages turned out to be negative for the duration of this so called "ungloomy" period? On second though, we won't hold our breath, just as we won't hold our breath for the Tatsuo Ito to print a retraction of his analysis based on fabricated, and meaningless, numbers .

Then again looking back Abe warned about all of this. Recall that in January 2014, CNBC penned a column explaining "Why wages in Japan are set to rise." In it we read:

In an editorial published on the World Economic Forum and Project Syndicate websites this week, Abe said he has come away from initial meetings between the government, business and labor leaders on a strategy where wage growth leads to stronger economic growth with confidence.

In retrospect, it is so obvious that his entire "strategy" was to simply fabricate all the wage growth data.

But how is it possible that even a failed Keynesian state in a terminal stage of social, economic and financial collapse would devolve to a "strategy" which one would traditionally associate with humiliated and discredited banana republics?

We wondered long and hard, and then we remembered this:

At that point everything fell into place.