According to new data released by the Federal Reserve, industrial production decreased 0.7% in December. During the same month, manufacturing output dropped 1.3%, with durable and nondurable manufacturing falling 1.1% and 1.5%, respectively.
According to Reuters, some of this decline can be attributed to rising interest rates. Many goods are purchased on credit, making them more expensive, and more Americans are choosing to spend their money on services.
Ryan Sweet, chief U.S. economist at Oxford Economics, told MarketWatch, “There are certain parts of the U.S. economy that are being hit harder than others and manufacturing appears to be headed toward a mild recession. The forecast remains for a mild recession to begin in the second quarter of this year.”