The ISM is positive at 50.2, but barely above the 50.0 break-even mark, and a bit below the Bloomberg Consensus Estimate of 50.5.

The ISM index, like nearly all other September indications, is pointing to trouble for the factory sector. At 50.2, the index is at its lowest point since May 2013. New orders, at 50.1, are at their lowest point since August 2012. Backlog orders, at a very low 41.5, are in their fourth month of contraction and won't be giving manufacturers much breathing room to keep up production. Export orders, at 46.5, are also in their fourth month of contraction and are a key factor behind the general weakness.

Production, at 51.8, continues to hold up better than orders but not by much and probably not for long given the weakness in orders. Input prices are in deep contraction at 38.0 which is the weakest reading since early in the year when oil prices broke down.

The ISM Peaked in September of 2014

Together with the various regional reports, manufacturing is clearly in recession. When was the last time the Fed hiked with such weakness?