US industrial production fell for a second month in a row in December amid lower factory output, the Federal Reserve said in data released on Wednesday that suggested manufacturers were slowing activity based on the softening demand for goods
WASHINGTON (Pakistan Point News / Sputnik - 18th January, 2023) US industrial production fell for a second month in a row in December amid lower factory output, the Federal Reserve said in data released on Wednesday that suggested manufacturers were slowing activity based on the softening demand for goods.
Industrial production, which accounts for manufacturing, mining and utility output, decreased 0.7% in December after a downwardly revised 0.6% drop recorded in November, the Fed report on Industrial Production and Capacity Utilization showed.
Separately, the New York division of the Fed reported on Tuesday that the NY Fed Manufacturing survey posted a -32.9 reading for December, versus a forecast of -8.6% and -11.20 for November. It was the steepest monthly slide in manufacturing since September 2021.
"The manufacturing numbers have been trending down for a while and PMIs have disappointed," economist Adam Button said in a post on the ForexLive forum, referring to the Purchasing Managers Index for manufacturing. "I'm not sure what the consumer will do in 2023 but manufacturing is undoubtedly in a recession. That said, it's a 'recession' from elevated post-pandemic levels so I'd look at it more as a normalization."
The slide in industrial production and manufacturing coincides with US producer prices falling their most in nearly three years in December, amid the sharpest drop in a year in retail sales.
Joseph Brusuelas, chief economist at RSM US, said in comments carried by The Wall Street Journal that the current trajectory of the economy suggested a "mild recession" at least for 2023.
Economists remain at odds with policy-makers on the probability of a US recession, with the Atlanta division of the Fed forecasting a 4.1% gross domestic product, or GDP, growth for the fourth quarter of 2022 after a 3.2% expansion in the third quarter. The Conference board, an economic analysis and forecasting group, meanwhile, expects GDP growth to slow to 0.2 percent for all of 2023.
