In the annual spring labor-management wage negotiations in 2017, many firms are likely to have raised their base pay for the fourth consecutive year. While the rate of increase is more or less the same as in the previous year, wage increases have become more widespread, as shown by the notable wage increases at small firms, which are experiencing particularly acute labor shortages.
Given that small firms account for a large share of employment, it is expected that the wage growth for employees as a whole will accelerate. Meanwhile, growth in private consumption had been slow following the consumption tax hike in 2014.