The economy has bottomed out, the government said Monday, maintaining its basic assessment of the economy in its report for June.

“While the economy continues to be in a difficult situation, it has bottomed out,” the Cabinet Office said in its report, leaving the wording unchanged from a month earlier.

In the May report, the government declared the economy had for the first time bottomed out in the latest recession.

The June report says that although some sectors have improved since the economy bottomed out, others have deteriorated, making it difficult for the government to change its overall assessment.

“We left the basic assessment unchanged because developments that occurred over the past month were not significant enough to warrant a change,” said Jun Saito, director for economic assessment and policy analysis at the Cabinet Office.

Looking ahead, the report sounds slightly more upbeat, saying increased exports and completion of inventory adjustments are expected to lead the economy to a recovery. But it still points to some downside risks to the economy.

“There are concerns over the downward pressure on final demand that may be exerted by such factors as severe employment and wage situations,” the report says.

On domestic demand, the report says business investment is declining and consumer spending remains flat.

But “firmness can be observed in some areas” of private consumption, it adds. According to Saito, consumer spending is particularly strong in the food sector.

The report says exports, especially to the rest of Asia, are increasing and some sectors of industrial production are showing signs of an incipient recovery.

“Corporate profits are showing signs of bottoming out,” the report says. However, the employment situation continues to be severe and the jobless rate remains high.

The report also says the housing sector is weakening, marking a downward revision of the sector’s assessment from the previous report, which said the housing sector was generally leveling off.

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