Manufacturing Peak?

With trade volumes flat or trending down worldwide, what to make of US manufacturing?

(Click on image to enlarge)

Figure 1: Manufacturing employment (blue), aggregate hours of production and nonsupervisory workers (red) and production (teal), in logs 2019M01=0. Source: BLS, Federal Reserve via FRED, and author’s calculations.

Now, trade does not weigh on manufacturing equally. Durables are particularly worrisome — and here the drop (in production) is more pronounced than in manufacturing overall.

(Click on image to enlarge)

Figure 2: Manufacturing production (blue), and durable manufacturing production in logs 2019M01=0. Light orange denotes Trump administration, orange denotes TCJA in effect. Source: Federal Reserve via FRED, and author’s calculations.

Durable production is 2.6% down below peak, compared to 1.7% for overall.

All this is why I (still) worry about an incipient recession.