Looking ahead, private consumption is likely to increase moderately as the employment and income situation continues to improve steadily. Regarding employee income, the labor share in the aggregate output has been on a declining trend in recent years, being below the long-term average, with corporate profits staying at high levels.
Meanwhile, a variety of indicators for the labor market -- such as the unemployment rate, the active job openings-to-applicants ratio, and the diffusion index (DI) for employment conditions in the Tankan (Short-Term Economic Survey of Enterprises in Japan) -- suggest that the labor market conditions have tightened. Thus, the conditions for wage increases largely have been met. Wages are labor costs for individual firms.