December: The Recession Indicator rose to 23.7%
－ The leading index fell for the first time in seven months
The Recession Indicator for Japan released by Japan Center for Economic Research (JCER) rose to 23.7% (Figure 1). The Leading Index as an underlying data declined for the first time in seven months, due to deteriorations in inventory ratio of final demand goods, consumer confidence, sales forecast of small businesses, and others. Although the recession probability is still below 67%, which is a reference level of recession, consumer sentiment in January get chilled further following declaration of a state of emergency, and economic outlook is highly uncertain.
【Figure 1. The Recession Indicator (December 2020)】
【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