US industry is powering down and layoffs among America’s tech titans are piling up.

When taken together with an extremely lackluster read on retail sales for December, Wednesday’s news flow out of the world’s largest economy certainly had a recessionary vibe.

Industrial production dropped 0.7% in December, Fed data showed. That was far larger than the drop consensus expected and nearly matched the most pessimistic guess from six-dozen economists.

It marked the third straight decline, and revisions showed November’s drop was triple the initially reported 0.2% decrease. Capacity utilization fell to 78.8%, below forecasts.

“[The] two reads will weigh further on Q4’s growth estimates and we’ll be watching for today’s GDPNow revisions to further refine forecasts before next week’s first look at Q4 GDP,” BMO’s Ian Lyngen remarked.

ING’s James Knightley was more direct. “Coming on the back of such a poor retail sales report, [the production plunge] reinforces the message that recession is on its way and we could in fact already be in it,” he said.

As mentioned here on Tuesday, if the current cycle matched the quickest first-hike-to-recession transition in history, a US downturn would start next month.

Reports that Microsoft planned to eliminate engineering roles appeared borne out, although in a filing, the company didn’t say specifically which jobs would be impacted by layoffs comprising around 5% of employees.

“On January 18, 2023, Microsoft announced to its employees a series of actions it is taking in response to macroeconomic conditions and changing customer priorities,” the company said, adding that those “actions” entail reducing the workforce by “approximately 10,000 employees by the end of the third fiscal quarter of 2023.” Microsoft will take a $1.2 billion charge ($0.12 worth of EPS) related to the decision.

Obviously, the US economy doesn’t live and die by employment in the tech industry, even if Americans live and die by whether their smart phones are charged or not. Still, the job cuts are adding up.

The chart above isn’t exhaustive and includes both planned and executed staff reductions. Tech companies cut about 81,000 jobs from January of 2022 through November, according to Challenger data.

Speaking in Davos Wednesday, Satya Nadella suggested tech “will have to do more with less.”

On the bright side, Larry Summers is feeling slightly better about the situation. He’s in Davos too, apparently. “We have to recognize the figures are better than what someone like me would have expected three months ago,” he said.