Manufacturing contracted for a second consecutive month in September, falling to its lowest level of activity in a decade, according to the Institute for Supply Management (ISM).
The group’s production manufacturing index slid to 47.8, down from 49.1 percent in August. Any reading below 50 percent indicates contraction.
{mosads}New orders, production and employment measures were all in negative territory, while a gauge of supplier deliveries held in positive territory, even though it dipped from the previous month.
Markets slumped on the news, with the Dow Jones Industrial Average falling 185 points, or 0.7 percent.
Trade was one of the main factors weighing down manufacturing.
“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,” said ISM Chairman Timothy R. Fiore.
President Trump, who made manufacturing a central part of his 2016 campaign, blamed the decrease on the Federal Reserve and its chairman, Jerome Powell.
“As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!” Trump tweeted.