March: The Recession Indicator marks 85.7%

－ The probability is above the warning level again

Takashi MIYAZAKI

  Senior Economist

2023/05/11

  The Recession Indicator for Japan in March 2023 released by the Japan Center for Economic Research (JCER) marks 85.7% (retroactively revised basis, Figure 1). Based on the Leading Index, this probability indicates the likelihood of entering a recession in the months ahead. The Leading Index in March declined for the first time in 2 months due to deteriorations in new job offers, inventory ratios of final demand goods and of producer goods for mining and manufacturing, and others. As a result, the probability exceeds again the warning level of 67% for a recession. On a retroactive revised basis, the probability for the previous month, February, is also revised upward, and the warning level has been above for 11 consecutive months since last May.

【Figure 1. The Recession Indicator (March 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.