- The ISM U.S. manufacturing Purchasing Managers’ Index plunged to 47.8% in September, the lowest since June 2009.
- This marks the second consecutive month of contraction.
- The new export orders index tanked to only 41%, the lowest level since March 2009.
A gauge of U.S. manufacturing slumped to the lowest level in more than 10 years in September as exports dived amid the escalated trade war.
The U.S. manufacturing Purchasing Managers’ Index from the Institute for Supply Management plunged to 47.8% in September, the lowest since June 2009, marking the second consecutive month of contraction. Any figure below 50% signals a contraction.
The new export orders index tanked to only 41%, the lowest level since March 2009, down from the August reading of 43.3%, ISM data showed.
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A measure of U.S. manufacturing unexpectedly fell deeper into contraction, posting the weakest reading since the end of the last recession as a global slowdown and the U.S.-China trade war increasingly weigh on the sector.
The Institute for Supply Management’s factory index slipped to 47.8 in September, the lowest since June 2009, according to data Tuesday. The figure missed all estimates in a Bloomberg survey that had called for an increase from August’s 49.1.
Treasury yields plummeted and U.S. stocks swung to losses on the report. The group’s production gauge slipped to a 10-year low while the employment measure also dropped to the lowest since January 2016. That’s a worrying sign before a jobs report Friday that’s forecast to show private payroll growth remains subdued.
The second straight reading below 50, the line separating expansion and contraction, extends the drop from a 14-year high just over a year earlier and may add to calls for the Federal Reserve to cut interest rates further. Slowing global growth has damped demand for manufactured goods at home and abroad while trade policy uncertainty has disturbed supply chains and put hiring plans on hold.
With the fortunes of flashy young companies such as We Co. and Peloton stealing headlines, it may be easy to forget about the worsening economic condition of flyover country, USA. That would be a mistake.
Regional economic indicators suggest that the financial health of the Midwest is waning, as trade tariffs start to take their toll on sectors from farming to manufacturing. The implications for the U.S. economy at large are significant.