Manufacturing ISM Worst Since 2009 on Severe Contraction of Export Orders

-edited

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

This surely is not "all" Trump's doing.

The percentage is debatable and a recession was due anyway. But Trump definitely exacerbated global problems that were already building.

No one wins trade wars.

Mike "Mish" Shedlock

Comments (34)
No. 1-13
numike
numike

drip drip drip

Tony Bennett
Tony Bennett

"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"

...

All?

Hardly. A factor. Sure. A big factor. Sure.

How about one of the longest (and poor quality leveraged enhanced) business cycles FINALLY ending? Payback will be a b!tch as the past few years debt quality will prove to be just as bad as 2006 stuff. A lot of write offs / write downs on the horizon.

One more thing Krugman ... the only reason O got bailed on 2015 / 2016 was a massive credit response from China which kept the entire house of cards from collapsing THEN.

Mish
Mish

Editor

This surely is not "all" Trump's doing - The percentage is debatable and a recession was due anyway. But he definitely exacerbated the problems

Harry-Ireland
Harry-Ireland

Look, you can't really blame Trump for calling out the Fed. As stupid as these policies are, the USD can't compete against negative rates in the EU/Japan, etc. And how come this nitwit Krugman still holds high positions in academia and media?

njbr
njbr

Without a trillion dollar deficit we would already be in a recession.

Trump, the grand Keynesian.

hmk
hmk

Can any of this be attributed to the UAW strike? I live in MI and we usually are at the forefront of any economic slowdown and the biggest complaint I hear from business owners is a lack of decent labor. Also anecdotally I was at a GMC dealership on Saturday and speaking with the salesman he related that they took delivery of three 70-80k HD pickups on Friday and they were sold by Saturday. This seems to be a proxy for business conditions in general and I don't see any reason to believe there is a recession on the horizon.

Mish
Mish

Editor

Excellent point by HMK - I thought about that last week, then forgot about that today. Perhaps it explains the difference between Markit and ISM (Markit US PMI rose today). But Europe was abysmal across the board.

abend237-04
abend237-04

A note to zombie corps with anything like half your revenue coming from Europe who have been limping along betting things would get better: You just lost the bet. The dollar didn't weaken in time this time. To paraphrase Yogi: There's a fork up ahead; Take it. One road leads to an M&A scene you won't like, the other to bankruptcy court.

Casual_Observer
Casual_Observer

At some point Trump will think about resigning and declaring victory should a full blown recession ensue. Also if he knows he has no chance and is a compromised by next summer then I wouldn't rule anything out. I was laughed at by Mish and others for even saying impeachment was a possibility after the Mueller probe closed. I said then once Trump's full transgressions with Putin and others are revealed he would be in trouble before in the end of 2019. I voted for the guy but he did it to himself. He could have been like Reagan or Clinton and gone out on a high but it looks closer to Nixon now.

lol
lol

From the great depression to the Obama greater depression to now the Trump greatest depression...….all that money printing ain't getting itdone...not even close!

Country Bob
Country Bob

My company will be laying off a bunch of people this month. we got the first guess of what health care costs will be next year, plus the $15/hr nonsense... it just doesn't make sense to keep people on the payroll when they don't add $15/hr in value, never mind the healthcare costs.

The Dems do everything they can to price US workers out of a job, while the Fed makes it dirt cheap to replace marginally productive workers with automation.

Most people have too much "stuff" already, and most of the demand now is replacing old stuff. Demand is stable, no longer artificially growing from credit bubbles, but also not contracting either. A bit of automation and a bit of productivity growth, we can easily meet stable demand.

Meanwhile, the education system continues to pour out garbage. I doubt kids are inherently smarter or dumber at birth, but they don't learn self discipline, they don't learn basic math, they don't learn to operate basic tools ... Instead, they are taught gender neutral bathrooms and climate fraud and participation trophies.

That just makes them unemployable. Its not China's fault. Its not Trumps fault either. Its some combination of parents and schools, and its been building for decades.

Throwing more money at teachers unions (most of which goes to administrators, not teachers) won't fix the rotten foundation.

Stop wasting everyone's time with political indoctrination. There are too many robots capable of asking if you want fries with that.

Mish
Mish

Editor

This is not Mueller Far more serious

Mish
Mish

Editor

Conviction in Senate still unlikely - but now possible Russia was a joke - This is serious