In an alarming development for the US economy, ISM Manufacturing PMI for October has nosedived to 46.7, a stark contrast from last month’s 49.0 and shattering expectations which had anticipated it to remain steady. This marks the twelfth month in a row where the PMI has stayed below the critical 50-point mark, signaling a contraction in manufacturing activity. This persistent downturn is reminiscent of the distressing times during the 2007-2009 Great Recession.

Digging deeper into the data, new orders saw a decrease, moving from 49.2 to 45.5. This now marks the 14th month where new orders have contracted. Production levels, too, experienced a decline, sliding from 52.5 to a borderline 50.4. Employment metrics were not immune either, plummeting from 51.2 to 46.8. However, there was a minor uptick in prices, which moved from 43.8 to 45.1.

The ISM’s statement offered some insight into the broader implications of this data. They pointed out, “The correlation between the Manufacturing PMI and the entirety of the US economy suggests that the October reading of 46.7 percent equates to a decrease of minus-0.7 percent in real GDP, when viewed on an annualized basis.”

Full US ISM manufacturing release here.

U of Michigan consumer sentiment rose to 100.8 in September, up from 96.2 and beat expectation of 96.9. That’s the second highest level since 2004.

Surveys of Consumers chief economist, Richard Curtin: Consumer sentiment posted a robust rise in early September, reaching 100.8, the second highest level since 2004-only behind the March 2018 reading of 101.4. Importantly, the gains were widespread across all major socioeconomic subgroups. The Expectations Index reached its highest level since July 2004, largely due to more favorable prospects for jobs and income. Despite a lessening of expected gains in nominal incomes in September, inflation expectations also declined, acting to offset concerns about declining living standards. Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead. While consumers were somewhat more likely to anticipate that the economic expansion would continue uninterrupted over the next five years, nearly as many expected another downturn sometime in the next five years. The largest problem cited on the economic horizon involved the anticipated negative impact from tariffs. Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months.

Full release here.