US manufacturing could have entered recession in 2022

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US manufacturing could have entered recession in 2022

US manufacturing could have entered a recession in the fourth quarter of 2022, according to a range of measurements, in line with a global decline in industrial output, creating slack in commodity markets.

In November and December, the Institute for Supply Management's manufacturing purchasing managers' index fell below 50 points, which is the threshold for expansion from contraction.

The Federal Reserve manufacturing production index fell by 0.4 percent at the end of 2022, compared to 2021, with output down 0.4 percent in the same two months.

In the three months ending December 2022, producer price inflation for goods other than food and energy slowed to an annualized 4.2 percent from 11.5 percent in the three months ending in April 2022.

In the three months ending in December, manufacturing payrolls increased at an annualized 1.6 percent, down from an annualized 5.5 percent growth in the three months ending in April.

In November, container freight processing through the nine largest US ports slowed to 2.49 million twenty-foot equivalent units TEUs from 2.81 million in the same month a year earlier.

The most recent Association of American Railroads weekly data showed that containerized freight volumes were down 9 percent in the first two weeks of 2023 compared to the same period in 2022.

The manufacturing weakness in the US, Europe and China is a reason for the slump in commodity prices towards the end of 2022.