April: The Recession Indicator fell to 46.5%
－ A wide range of underlying statistics improve, the probability is below the warning level
The Recession Indicator for Japan in April 2023 released by the Japan Center for Economic Research (JCER) fell to 46.5% (retroactively revised basis, Figure 1). Based on the Leading Index, this probability indicates the likelihood of entering a recession in the months ahead. In April, the consumer confidence, which indicates consumer sentiment, improved against the backdrop of wage hike trends and normalization of economic activity, and also in corporate sector, sales forecast of small businesses and inventory ratio of final demand goods improved, the Leading Index rose for the first time in two months. As a result, the probability has fallen below the recession warning level of 67% on a retroactively revised basis for three consecutive months since February.
【Figure 1. The Recession Indicator (April 2023)】
【Table 1. The Recession Indicator and the Leading Index (over the last year)】
* The estimation method of the Recession Indicator has revised since the release in July 2020. Please refer to here for more details.
－ Deterioration of the employment situation could be a factor.
－ Huge probability reduction contributed by the well-performed indices of an inventory ratio
－ Exceeding the warning level due to the stock pile-up resulting from the dismal foreign demands.
－ The probability almost stayed at the previous month's level.
－ New housing construction and stock prices contributed to the improvement