The manufacturing PMI sank nearly 3 points to 47.6 this month. And when excluding the early months of the pandemic, the production and orders measures both retreated at the steepest rates since 2009.

On a more comforting note, the composite measure of input prices eased for a sixth-straight month, though it remains historically elevated. The prices-received gauge fell for a seventh month.

Output expectations over the next year picked up, the report showed, in part reflecting more stability in supply chains. The index, however, remains softer than it was a year ago.

“November even saw increasing numbers of suppliers, factories and service providers offering discounts to help boost flagging sales,” Williamson said. 

“In this environment, inflationary pressures should continue to cool in the months ahead, potentially markedly, but the economy meanwhile continues to head deeper into a likely recession,” he said.

Eoin Treacy's view

Today’s PMI figure was S&P’s estimate. The University of Michigan figure is due out on December 1^st. The one thing PMI figures are useful for is a reading below 50 is a necessary condition for a US recession. That doesn’t mean every reading below 50 leads to a recession but there has never been a recession with a reading below 50.

Together with the inverted yield curve and quantitative tightening the odds of corporate profits holding up are slim. There is clear scope for a substantial recovery when financial conditions eventually loosen up but with inflation so high, central banks are unlikely to relent in their tightening policies.

The base case has to remain that there is summation potential for additional new lows to be posted before the peak of easing results in a major low for risk assets. To believe that the low has already been reached is an example of hope over experience.