A BOJ spending gauge is also pointing to a recovery. Its real consumption activity index stood at 105.2 in June this year, compared with a record high of 108.6 in March 2014, the month before the sales-tax increase. BOJ Governor Haruhiko Kuroda has repeatedly said the labor shortage would push up wages and prices.
That’s not happening much yet, and the weak inflation is still welcomed by consumers, according to Junichi Makino, chief economist at SMBC Nikko Securities Inc. "The fact that prices are not rising much is improving consumer sentiment," Makino said.
The next test for the economy is for businesses to offer significant pay hikes, and for households to keep spending as consumer prices rise.
Does the bold phrase mean "The next test for the economy is whether businesses will offer significant pay hikes, and households will keep spending as consumer prices rise."?