The Manufacturing ISM is in the second month of contraction and the worst since June of 2009.

The September 2019 Manufacturing ISM® Report On Business® isn't pretty, to say the least.

The overall index, new orders, and production are all negative. Export orders are in severe contraction, down for the third month.

Trade-War Comments by Manufacturers

• “Continued softening in the global automotive market. Trade-war impacts also have localized effects, particularly in select export markets. Seeing warehouses filling again after what appeared to be a short reduction of demand.” (Chemical Products)
• “Chinese tariffs going up are hurting our business. Most of the materials are not made in the U.S. and made only in China.” (Food, Beverage & Tobacco Products)
• “Economy seems to be softening. The tariffs have caused much confusion in the industry.” (Electrical Equipment, Appliances & Components)

Placing the Blame

OK, that's not good. ISM manufacturing index. Important contrast with 2015-16 slump, which was due to nonpolicy factors (mainly slump in oil prices and hence energy investment). This is all about Trump's trade war pic.twitter.com/Riy6T0aHR2

— Paul Krugman (@paulkrugman) October 1, 2019

Here's how @IanShepherdson framed his note today: "If consumers’ confidence seriously falters, the U.S. could tip into the first recession ever caused directly by the actions of the President rather than the action of tight monetary policy on an overstretched private sector."

— Nick Timiraos (@NickTimiraos) October 1, 2019