A gauge of U.S. manufacturing plunged last month by the most since October 2008, a fresh sign of deceleration in the economy amid global strains across the sector.
The Institute for Supply Management index dropped to a two-year low of 54.1, missing all estimates in Bloomberg's survey, data showed Thursday. All five main components declined, led by new orders slumping the most in almost five years and the steepest slide for production since early 2012. Employment, delivery and inventory gauges fell.
The index compiled from a survey of manufacturers has tumbled sharply from a 14-year high in August, though it remains above the 50 dividing line between expansion and contraction. The 5.2- point drop from the prior month has been exceeded just twice this century, both times during recessions: in the financial crisis a decade ago and following the Sept. 11, 2001, terror attack.
Such weakness adds to signs that President Donald Trump’s trade war and a fading lift from fiscal stimulus are weighing on American producers. Previous reports showed five Federal Reserve indexes of regional manufacturing all slumped in December, the first time they’ve fallen in unison since May 2016.
Signs of trade-related spillovers in the world's largest economies and other export-oriented nations are multiplying.
China's official factory gauge has fallen into contractionary territory, and a global manufacturing index from JPMorgan Chase & Co. and IHS Markit dropped to the lowest level since September 2016. On Wednesday, Apple Inc. cut its revenue outlook for the first time in almost two decades, citing weaker demand
Source : Bloomberg