Manufacturing Has Peaked This Economic Cycle

Mish

Manufacturing is looking increasingly recessionary.

Peak Manufacturing

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Key Manufacturing Details

  • For the first time in history, manufacturing production is unlikely to take out the previous pre-recession peak.
  • Unlike the the 2015-2016 energy-based decline, the current manufacturing decline is broad-based and real.
  • Manufacturing production is 2.25% below the peak set in december 2007 with the latest Manufacturing ISM Down 5th Month to Lowest Since June 2009.

Other than the 2015-2016 energy-based decline, every decline in industrial production has led or accompanied a recession.

Manufacturing Jobs

After a manufacturing surge in November due to the end of the GM strike, Manufacturing Sector Jobs Shrank by 12,000 in December.

PPI Confirmation

Despite surging crude prices, the December Producer Price Inflation was Weak and Below Expectations

Shipping Confirmation

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Finally, please note that the Cass Year-Over-Year Freight Index Sinks to a 12-Year Low

Manufacturing employment, shipping, industrial production, and the PPI are all screaming the same word.

In case you missed the word, here it is: Recession.

Mike "Mish" Shedlock

Comments (16)
No. 1-13
LB412
LB412

Oil services/production and Boeing are both significant negatives.

ksdude69
ksdude69

I think Webster removed that word. The liars will never use it. Well, unless they haven't been elected yet.

magoomba
magoomba

After so many years of mal investment, mismanagement, mal education, and looting, the sector seriously lacks the talent, experience, and ability to produce anything useful much less recover.
It will be years before any improvement can begin. For now, with the capital and edu cartels so badly wielded by idiots, the deterioration can only continue.

magoomba
magoomba

Atlas didn't shrug, he spazzed out totally and spewed from both ends.

Tony Bennett
Tony Bennett

"Manufacturing is looking increasingly recessionary."

...

If it looks like a duck ...

Yesterday Census Bureau out with latest Manufacturing number (November). Despite pedal to the metal debt growth, mfg pathetic.

Numbers are year over year (November) for Total Manufacturing adjusted.

Sales ... -0.8%

Inventories ... +2.7%

Disinflationary / deflationary breezes picking up.

Greggg
Greggg

But the stock market.... lol.

TumblingDice
TumblingDice

Does recession mean the stock market will go down? I bought Microsoft stock in 2012 and have done quite well.

Microsoft Stock over the last 9 years Nov 2012 $26.45 (purchased, dividend $.92)

The following years are the January close price for consistency. 2013 - 27.45 2014 - 37.84 2015 - 40.40 2016 - 55.09 (up 100%) 2017 - 64.65 2018 - 95.01 (up 250%) 2019 - 104.43 (up 290%) 2020 - 165.00 (Up 520%, Dividend, $2.04)

As long as the Fed can fool others that inflation is low, and keeps interest rates artificially low and jawbones going to zero. What are my choices? CDs at 1 or 2%, forget about it.

thimk
thimk

gee 10years of massive fed stimulus and we can't exceed previous boom cycle ! /s

shamrock
shamrock

Yep it has peaked. Or maybe it's bottoming out. Hard to tell.

lol
lol

If it isn't getting a check from big gov't,a subsidy from big govt.contract from big govt,handout from big govt,it's closing up shop goin out of business.Like all bankrupt 3rd world banana republics,you have a dead (non existent)private sector which means the only real driver of growth is gov't,which produces nothing of value (less than nothing)so stand by for more taxes out the wazu,fees,soaring depts. deficits as the failed state called USA takes it's last breath.

Six000mileyear
Six000mileyear

From an Elliott Wave technical analysis standpoint, one little rally is still possible. It may or may not break the last pre-recession high, but is not expected to be as strong as the rally from 2016 to 2018.

The slope of the manufacturing index between 1975 and 2008 is noticeably steeper than the slope of the index since 2010. This indicates a long term top has been forming.

Casual_Observer
Casual_Observer

1% GDP and 1% rates coming in 2020.


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