The manufacturing sector in the US contracted significantly in the month of September, as the nation’s manufacturers cut back on production at a faster pace than expected, according to the Institute of Supply Management’s manufacturing index. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better this month than last. The PMI came in at 43.5%, down from 49.9% in August. It is the sharpest 1-month decline since 1984 and very close to recessionary levels. Economists were surprised by the number, as forecasts had the number closer to 49.6%. Readings above 50% indicate growth, and anything below, contraction.

The September new-orders index plunged to 38.8% from 48.3% in August, the ISM’s data showed. The production index fell to 40.8% from 52.1%.

The PMI is at its lowest levels since October 2001.

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