Japan’s economic expansion may be the longest in the postwar period, but households have felt little benefit. Employment and wage trends as of July, along with improving corporate profits, have been reported.
The Cabinet Office’s Monthly Economic Report describes the Japanese economy as “recovering moderately.” Corporate earnings are improving, with ordinary profit up 14.6% year on year in the January–March 2026 quarter. Employment conditions have also remained firm, with the unemployment rate standing at 2.4% in July 2026 (seasonally adjusted).
For households, what matters is not the amount of pay itself so much as the movement in real wages, which reflects how much can be purchased with the same amount of pay. Total cash earnings rose 4.7% year on year, while real wages rose 2.4% and scheduled cash earnings rose 4.1%. However, special cash earnings, including bonuses, are also included.
The economic expansion is said to have started in May 2020, during the COVID-19 pandemic, and the recovery has continued for an extended period. Whether everyone’s income has increased and households have gained greater financial room is a separate question, however, and people may not feel that the economy is experiencing a “strong boom.”
In light of this prolonged expansion, the definition of an economic expansion has once again been clarified as a period during which economic activity improves from a trough to a peak.