The U.S. manufacturing business activity index (PMI) from the Institute for Supply Management (ISM) fell below the 50-point threshold separating activity growth from contraction 2 times in a row, both in November and December, Reuters writes.

The Federal Reserve’s manufacturing production index declined in both November and December and showed a 0.4% annualized decline in output at the end of 2022.

U.S. manufacturers raised selling prices again in the fourth quarter, but the pace of producer price inflation slowed as input cost pressures eased and demand for goods fell.

Producer price inflation for goods other than food and energy slowed to an annualized rate of 4.2% for the 3 months ending December 2022.

U.S. manufacturers also increased employment, but the pace of growth slowed due to falling demand for goods.

Manufacturing payrolls increased at an annualized rate of 1.6% for the quarter.

Falling demand for goods and trucking is already leading to increased discounts to stimulate sales and eliminate excess inventory.

U.S. consumer prices for goods other than food and energy fell at an annualized rate of 4.8% for the quarter.