May: The Recession Indicator fell to 37.1% further
－ New housing construction and stock prices contributed to the improvement
2023/07/10
The Recession Indicator for Japan in May 2023, compiled by the Japan Center for Economic Research (JCER), dropped to 37.1% (retroactively revised basis, Figure 1). Based on the Leading Index, this probability indicates the likelihood of entering a recession in the months ahead. In May, total floor area of new housing construction started improved against the backdrop of housing starts, and also stock prices (TOPIX) and inventory ratio of producer goods for mining and manufacturing improved, the Leading Index rose for the second consecutive month. As a result, the probability has declined below the recession warning level of 67% on a retroactively revised basis for two consecutive months since April of this year.
【Figure 1. The Recession Indicator (May 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.
- 2023/11/09
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September: The Recession Indicator was 56.5%
－ Deterioration of the employment situation could be a factor.
- 2023/10/10
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August: The Recession Indicator was 31.7%
－ Huge probability reduction contributed by the well-performed indices of an inventory ratio
- 2023/09/08
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July: The Recession Indicator was 82.7%
－ Exceeding the warning level due to the stock pile-up resulting from the dismal foreign demands.
- 2023/08/08
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June: The Recession Indicator was 44.5%
－ The probability almost stayed at the previous month's level.
- 2023/07/10
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May: The Recession Indicator fell to 37.1% further
－ New housing construction and stock prices contributed to the improvement
