December: The Recession Indicator reached 92.3%
－ The highest level since November 2019
The Recession Indicator for Japan in December released by the Japan Center for Economic Research (JCER) reached 92.3% (Figure 1). The indicator denotes the probability of recession about six months later. In December, the Leading Index as the underlying data fell for two consecutive months, due to deteriorating in the inventory ratio of final demand goods, new job offer and others. While consumer confidence improved with no movement restriction during the New Year holidays, eight in eleven components of the Leading Index were deteriorated, and therefore the Recession Indicator far exceeded 67%, which is a reference point of signaling recession, and reached highest level since November 2019 (95.0%).
【Figure 1. The Recession Indicator (December 2022)】
【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