Commentary
The saving grace of the U.S. economy for most of 2022 had been employment, which had printed positively each month. Employment even seems to have ameliorated the two consecutive quarters of declining GDP that occurred in the first half of the year that we identified as a recession.  Unfortunately, we don’t think 2023 will be so auspicious.
Consider that: Industrial production and capacity utilization, the measures of the strength of productivity in the economy, are declining.
Tech layoffs prior to fourth-quarter 2022 earnings releases tend to support the view that tech earnings will be lackluster.
Japan and China are both trying to export their way into recovery, leading to a global glut of goods.
The Purchasing Manager’s Index is below 50, indicating contraction.
We’ve had a long-standing inverted yield curve. Our view is that all this points to declining economy, a pullback on rate hikes by the Federal reserve, and, likely, recession….