industries was 6. 4 percent, up from the june tankan. in the household sector, the employment and income situation has been improving steadily ; as a result, private consumption has been resilient. turning to labor market conditions, the active job openings - to - applicants ratio is currently 1. 24, a level last seen in 1992, and the unemployment rate has declined to 3. 1 percent, a level last seen in 1995. thus, labor market conditions have continued to tighten and japan is in a situation close to “ full employment. ” as seen in the diffusion index for employment conditions released in the september tankan, firms ’ perception that they are facing a shortage of labor has intensified, and labor market bis central bankers ’ speeches conditions seem to continue to be tight despite the flattening of exports and production ( chart 2 ). with corporate profits having risen to historically high levels and the tightening in labor market conditions continuing, there has been upward pressure on wages. scheduled cash earnings have been increasing on a year - on - year basis for three consecutive quarters since the turn of the year, reflecting in part increases in base pay, which has gone up for two years in a row. moreover, various surveys suggest that summer bonuses this year were raised again following the substantial increase last year ( chart 3 ). on the back of the steady improvements in the employment and income situation, private consumption in the julyseptember quarter increased on a quarter - on - quarter basis. taking, in addition, more recent anecdotal evidence into account, the bank judges that private consumption has been resilient. with a virtuous cycle from income to spending in both the corporate and household sectors in place, japan is likely to continue to see real gdp growth through fiscal 2016 of about 1. 0 – 1. 5 percent. this rate exceeds japan ’ s potential growth rate, which is currently estimated to be around 0. 5 percent or lower. prices let me turn to prices. the year - on - year rate of change in the consumer price index ( cpi, all items less fresh food ), which was minus 0. 5 percent just before the introduction of qqe, increased to as high as 1. 5 percent in april 2014, excluding the effects of the consumption tax hike. however, reflecting the substantial decline in crude oil prices since the summer of 2014, annual cpi inflation declined and has been about 0 percent in recent months ( chart 4 ). nevertheless, once the effect

across is that deflation will be overcome and the price stability target of 2 percent will definitely be achieved. and this will happen at the earliest possible time. the bank considers it desirable to achieve a situation in which both prices and wages rise in a balanced manner. however, this does not mean that the bank will adjust its policies aimed at achieving moderate inflation simply in response to the pace of increase in wages. from both a theoretical and an empirical perspective, prices generally move in parallel with wages ( chart 9 ). if the bank were to move slowly toward achieving the price stability target, wage adjustments would also be slow. at the end of the day, this issue comes down to a chicken and egg situation. in order to overcome deflation – in other words, break the deadlock – somebody has to show an unwavering resolve and change the situation. this means that, when it comes to price developments being at stake, the bank must be the first - mover. the bank has been pursuing qqe based on the stance that it will do whatever it can to achieve the price stability target. as a result, conditions in financial markets – as exemplified by stock prices and foreign exchange rates – as well as corporate profitability and labor market conditions – particularly the unemployment rate – have improved significantly, so that the underlying trend in inflation has changed markedly. looking at the cpi for october 2015, the year - on - year rate of change in the cpi for all items less fresh food and energy was 2. 0 percentage points higher and that for all items less food and energy was 1. 5 percentage points higher than in march 2013, that is, immediately before the introduction of qqe. as evidenced by these figures, the bank has the capability as well as the strong will to achieve price stability at 2 percent inflation at the earliest possible time. the bank of japan ’ s price stability target of 2 percent provides a benchmark which firms can refer to when adjusting wages and individual prices. once 2 percent inflation prevails, firms that continue to base their investment, hiring, and price - setting decisions on a deflationary mindset will be at a disadvantage and fall behind their competitors. in our view, the environment for wage increases – such as a tight labor market and high corporate profits – is certainly already well established. however, it is of course up to firms ’ management and labor whether to raise wages in line with the 2 percent inflation benchmark in anticipation of price increases of 2 percent