But most analysts agree that what's happening to manufacturing is evidence Trump's tariffs are doing real harm to the US economy and is a warning sign for what could happen to other industries, especially as the tariffs expand by the end of the year onto almost all Chinese products.
The Institute for Supply Management on Tuesday said its manufacturing report fell by 1.3 points to 47.8%. The economy's fading fortunes have been attributed to the Trump administration's 15-month trade war with China, which has sapped business confidence and undermined manufacturing.
Despite the government's claim of protecting the country's manufacturing sector as the goal of the trade negotiations with China, the opposite now rings true.
"An economic downturn, especially manufacturing job losses, would hurt any president, but could be especially damaging to Trump because they go against the brand he has so carefully created for himself", said Douglas Heye, a former communications director at the Republican National Committee.
President Trump was fast to blame the Fed Chair Jerome Powell on falling manufacturing activity, calling the Fed "pathetic". They are their own worst enemies, they don't have a clue.
Factory activity in the USA hit a ten-year low in September, the Institute for Supply Management (ISM) said in a report released on Tuesday.
A measure of US manufacturing unexpectedly fell deeper into contraction, posting the weakest reading since the end of the last recession as a global slowdown and the U.S. A Fed measure of production already signaled US manufacturing is in a recession when it contracted in the first half of this year.
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Wall Street stocks tumbled on Tuesday as a dismal report on manufacturing exacerbated fears that the slowing United States economy could tip into recession.
Slok warned earlier in the day that while the ISM reading was bad - a reading of 41% for new export orders is even worse. 'There is no end in sight to this slowdown, the recession risk is real'. But his confrontational trade policies have so far had the opposite effect and helped spur the Federal Reserve to cut interest rates in September for a second time this year.
"The main reasons appear to be slower growth overseas and trade policy developments - two sources of uncertainty that we have been monitoring all year", Fed Chairman Jerome Powell told reporters at a press conference last month. These are further indicators that there is an issue with the current direction of the economy. Additionally, New Export Orders underwent a 2.3% decrease since August.
The US-China trade war coincides with an ebbing boost from last year's $1.5 trillion tax cut package.
Investors will, of course, now have one eye on tomorrow's all-important nonfarm payrolls report, which will give us a better indication as to how the U.S. labour market is performing going into the final quarter of the year. Nevertheless, the data does show that the economy is still growing, but at a slower rate than before.
Supplier deliveries was the only sub-index above 50, which for that gauge indicates slower deliveries. The S&P 500 lost 1.23% yesterday, while the Nasdaq closed 1.13% lower.
On Tuesday, the 1st of October 2019, data from the US Institute for Supply Management (ISM) had reported a shocking nosedive of US manufacturing activity to a 10-year low figure in September, as a protracted trade spat with Beijing had been weighing on exports.