If labor market conditions had tightened, due mainly to a decline in labor supply, the number of employees would have declined since the number of those who wish to work would decrease with wages unchanged and the labor supply curve would shift to the left (Chart 4).1 In reality, the number of employees has continued to increase, along with a moderate rise in wages, and therefore employee income has continued to register relatively high growth.
Such improvement in the employment and income situation, together with generally favorable corporate profits, has supported solid domestic demand. B.