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“We have now tariffed our way into a manufacturing recession in the U.S. and globally”
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Loading...A gauge of U.S. manufacturing showed the lowest reading 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 came in at 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 was only 41%, the lowest level since March 2009, down from the August reading of 43.3%, ISM data showed.
“We have now tariffed our way into a manufacturing recession in the U.S. and globally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
The report fanned fears of a recession and hit the stock market. The Dow Jones Industrial Average lost more than 200 points, erasing earlier gains on Tuesday.
“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” Timothy Fiore, ISM chair, said in a statement.
The ISM employment gauge for the sector showed the lowest reading since January 2016, primarily driven by a lack of demand. New orders, backlog, raw materials inventories exports and imports also contracted across the board last month, ISM data showed.
“There is no end in sight to this slowdown, the recession risk is real,” Torsten Slok, chief economist at Deutsche Bank said in a note on Tuesday following the report.
Source: CNBC
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