The Institute for Supply Management (ISM) reported today that its closely-watched manufacturing index fell to 54.4 in September from 56.3 in August.
Manufacturing expanded in September at the slowest pace in 10 months, adding to the mounting evidence that the manufacturing sector is slowing after leading the recovery for the past year. The ISM manufacturing index has fallen four out of the five months since April, and now stands at the lowest level since last November, a clear sign that the recovery continues to struggle. Transition from economic growth supported by inventory rebuilding and temporary surges from fiscal stimulus to a self-sustaining recovery is proving to be rocky. The fact that most of the components of today’s report, such as new orders, production, employment and exports, all moderated last month signals that the slowdown in the manufacturing recovery will spill into the fourth quarter as well and that the outlook for jobs remains gloomy.