employees has continued to increase, when smoothing out fluctuations, and the active job openings - to - applicants ratio has been at a high level that exceeds the peak marked during the bubble period. in addition, the unemployment rate has remained at a low level. amid the tight supply - demand conditions in the labor market, the year - on - year rate of increase in scheduled cash earnings of full - time employees has been in the range of around 0. 5 - 1. 0 percent. in addition, that in hourly scheduled cash earnings of part - time employees, which are responsive to supply - demand conditions in the labor market, has registered relatively high growth at around 2 percent. as a result, although total cash earnings per employee have risen moderately, albeit with fluctuations, the increases have remained relatively weak compared to tight labor market conditions, partly due to the high wage elasticity of labor supply in recent years, mainly among women and seniors. as japan's economy is likely to continue on an expanding trend, it is expected that the supplydemand conditions in the labor market will remain tight. i therefore expect the rate of increase in total cash earnings per employee to gradually accelerate. however, there is a risk that firms will remain cautious with their decisions on wage setting, and in this context, i am paying close attention to developments in their stance regarding wages. b. prices next, i will turn to price developments, taking into account the employment and income situation. the year - on - year rate of change in the cpi ( all items less fresh food ) has remained at around 0. 5 percent. the relatively weak price developments compared to the economic expansion and tight labor market conditions are attributed to the mindset and behavior based on the assumption that wages and prices will not increase easily. these mindset and behavior have been deeply entrenched among firms and households, due mainly to the experience of prolonged low growth and deflation. this will not change overnight, and it may in fact take a considerable amount of time. also, firms have been making efforts to absorb the upward pressure of costs on prices by increasing labor - saving investment and streamlining their business process, and this has allowed firms to maintain their cautious stance toward raising prices. meanwhile, firms'moves to pass on increases in, for example, personnel expenses and distribution costs, to sales prices have been slowly spreading. looking at annual price changes across all cpi items less fresh food, the share of price - increasing items minus that of pricedecrea

to be tackled, such as securing managers and adapting to different corporate 4 / 5 bis central bankers'speeches cultures. recent protectionist moves could also become an obstacle to the free mobility of labor, goods, money, and information. since japan's domestic market is small, i think that the business environment is becoming increasingly severe for japanese firms. despite these trends, i see the potential growth rate rising through improvements in productivity as a wide range of entities continue to introduce structural reforms and implement growth strategies. with the output gap remaining positive, firms have continued to undertake laborsaving investment, mainly through the use of information technology. furthermore, they have proceeded with working - style reforms and other initiatives that reflect demographic changes and the considerably tight labor market conditions. steady progress has also been made in achieving diversity in the labor force, through the hiring of women, seniors, and foreign workers. as managers and workers have become aware of the need for greater efficiency and productivity, an increasing number of firms have been working to this end, not only in manufacturing, but also mainly in the administrative field, where robotic process automation ( rpa ) has been introduced. there is still significant room for improvement, mainly in the use of human resources and the enhancement of business efficiency, and i think we can expect a further rise in productivity through such initiatives. although these structural reforms and growth strategies may exert downward pressure on wages in the short term, i believe that they will play a role in underpinning the virtuous cycle from income to spending in the long term. specifically, rising productivity will act as the starting point of such a cycle, stimulating price rises through increased wages and private consumption. let me note, however, that raising productivity and growth potential does not occur overnight. it is therefore important to ensure a sustained virtuous cycle, in which increased demand encourages progress in various initiatives, as the bank's monetary policy stimulates aggregate demand and reasonably tight supply - demand conditions are maintained. thus, to achieve its price stability target and realize sustainable economic growth in a coordinated manner, the bank should persistently continue with its powerful monetary easing and firmly support the initiatives of a wide range of entities. 5 / 5 bis central bankers'speeches