August: The Recession Indicator was 31.7%

－ Huge probability reduction contributed by the well-performed indices of an inventory ratio

Yutaro SHIMAMURA

  Economist

2023/10/10

  The Recession Indicator for Japan in August 2023, compiled by the Japan Center for Economic Research (JCER), was 31.7% (retroactively revised basis, Figure 1), which was the lowest number since December 2021. In August, the leading index (CI, henceforth) increased by 1.3 points, which first decreased the past probabilities of April to July, especially. On top of that, the August probability marked 31.7% by 9.8% points reductions from the previous month (retroactively revised basis). Indices of Producer's Inventory Ratio of Finished Goods (Final Demand Goods and Producer Goods for Mining and Manufacturing) played a main role in increasing the CI even though Consumer Confidence Index became to a negative contributor to it.

【Figure 1. The Recession Indicator (August 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.