to the level seen at the start of 2020, services consumption has been slow to pick up, due in part to the impact of the resurgence of covid - 19. given uncertainty as to when the pandemic will subside, consumption will likely remain weak for some time. chart 5 real consumption cy 2019 = 100 104. 6 98. 2 93. 3 87. 3 cy2013 durable goods non - durable goods services overall ( consumption activity index, real ) source : bank of japan, " consumption activity index. " let us take a closer look at developments in the employment situation, which underpin private consumption. as presented in the left panel of chart 6, the unemployment rate, after having climbed to 3. 1 percent, improved slightly to 2. 9 percent ; however, the rate remains at a high level compared with that prior to the covid - 19 outbreak. to examine in more detail changes in the number of employed persons, chart 7 compares the number of employed persons by gender and age group between the average for the 2013 - 2019 period and the total for 2020, with the latter reflecting the impact of covid - 19. the chart reveals that, for each age group, in 2020 the number of employed persons started to trend downward. this is primarily attributed to the decrease in the number of non - regular employees, with the younger generations and women exhibiting significant changes. yet, for women aged 25 - 64, there was an increase in the number of regular employees, despite the extent of the decrease in the number of non - regular employees. as can be seen in the right panel of chart 6, the year - onyear rate of change in nominal wages has been negative since april 2020. in particular, it saw a larger decline again at the end of 2020, primarily reflecting a decrease in special cash earnings ; how this will affect future consumption is a matter of concern. chart 6 labor market conditions unemployment rate nominal wages and labor force participation rate % % y / y % chg. 61 - 1 60 - 2 unemployment rate ( left scale ) 58 - 4 source : ministry of internal affairs and communications, " labour force survey ( basic tabulation ). " chart 7 special cash earnings total cash earnings labor force participation rate ( right scale ) cy85 1985 90 contractual cash earnings 59 - 3 cy 16 2016 changes in number of employed persons female 10, 000 persons 10, 000 persons - 20 - 10 - 40 - 20 - 30 note : figures are based on continuing observations following

##ity but also to implement measures to contain any downward pressure that may be exerted on prices and thereby support japan's economy to return to a powerful growth path. i would first like to present my view on the transmission channels through which changes in the number of confirmed cases of covid - 19 and subsequent public health measures affect economic activity and prices. a surge in the number of covid - 19 cases, for example, will lead to the tightening of public health measures. this will in turn not only curb private consumption directly but could also dampen private consumption and firms'fixed investment indirectly, through deterioration in consumer sentiment and increased uncertainty over economic and financial conditions. these developments will exert downward pressure on prices through deterioration in the output gap toward excess supply. judging from a model that assumes the aforementioned transmission channels and estimating future price developments based on japan's situation regarding covid - 19 to date, the risk of prices becoming stagnant has increased further. if the timing of a turnaround in the output gap toward excess demand is delayed due to the resurgence of covid - 19, prices are expected to remain under downward pressure for a longer period, compared with a scenario in which there is no resurgence. moreover, given that the formation of inflation expectations is highly adaptive in japan, the longer the rate of inflation remains stagnant, the less likely inflation expectations are to rise. as i have explained, if there are repeated resurgences of covid - 19, prices are expected to remain stagnant for a protracted period, with both the output gap and inflation expectations being pushed down. based on this recognition, i consider that the bank needs to strengthen monetary easing in terms of yield curve control and its commitment regarding the future conduct of monetary policy. as for yield curve control, with a view to encouraging firms to make investment for growth, such as through active business fixed investment for the post - covid - 19 era, it is appropriate for the bank to lower short - and long - term interest rates by actively purchasing japanese government bonds ( jgbs ). i believe that supporting investment for growth through monetary easing does not necessarily involve a trade - off with the spread of covid - 19. in terms of the bank's commitment regarding the future conduct of monetary policy, in order to avoid japan's economy returning to deflation, further coordination of fiscal and monetary policy is necessary, and it is appropriate for the bank to revise the forward guidance for the policy rates