January: The Recession Indicator marks 2.7%
－ The leading index rose for the first time in two months
The Recession Indicator for Japan released by Japan Center for Economic Research (JCER) marks 2.7% (Figure 1). The Leading Index as an underlying data rose for the first time in two months, due to improvements in inventory ratios of final demand goods and of producer goods for mining and manufacturing, commodity price index, and others. Accordingly, the recession probability remains low level, significantly below 67%, which is a signal of recession. Although consumer sentiment deteriorated following the declaration of the state of emergency, indicators in manufacturing industry maintaining relatively steady and financial markets pushed up the Leading Index due to expectations for the normalization of economic activities by spreading vaccines.
【Figure 1. The Recession Indicator (January 2021)】
【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