“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” said Timothy R. Fiore, chair of ISM.

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The ISM manufacturing index was 47.8 in September, down even more than the 49.1 reading in August. Any number below 50 indicates the industry is in recession territory. Many analysts had forecast a rebound, but it has yet to materialize.

Manufacturing fell into a technical recession in the first half of the year, and the latest ISM data indicates the situation appears to be getting worse.

Concerns are rising that the contraction in manufacturing could spill over into the rest of the U.S. economy. Stocks sold off quickly on the news that nearly every manufacturing sector reported trouble, with the Dow Jones industrial average ending the day with a 344-point loss.

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“There is no end in sight to this slowdown, the recession risk is real,” said Torsten Slok, chief economist at Deutsche Bank Securities, in an email to clients.

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Manufacturing accounts for about one-tenth of the U.S. economy, making it less of a barometer of what’s ahead of the U.S. economy than it once was. But most analysts agree that what’s happening to manufacturing is evidence Trump’s tariffs are doing real harm to the U.S. 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 nearly all Chinese products.

“We have now tariffed our way into a manufacturing recession in the U.S. and globally. What’s the strategy now? It better be more than the Chinese buying more soybeans,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in an email.

In perhaps the most alarming sign of all, employment also fell in the ISM report, an indication that manufacturers are so worried that they are laying off employees. A plastics and rubber products company said it laid off 10 percent of employees.

Manufacturing remains an important industry in key swing states such as Michigan, Wisconsin, Pennsylvania and Ohio. There was a manufacturing recession heading into the 2016 election that many say contributed to Trump’s slim win in key states. Now Trump has to campaign against a similarly weak backdrop.

New orders, production and exports were all down in September as manufacturers struggled to sell their products, especially abroad. New exports orders plunged to 41, according to the index. Many European economies are teetering on the verge of recession, and China’s economy has weakened as the trade fight has intensified, drying up demand for U.S. products and making it more expensive to import some parts from China.

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The World Trade Organization just downgraded its forecast for global trade growth this year and next as the trade war shows little sign of ending soon. “Job creation may also be hampered,” the WTO warned.

Last year was the best for manufacturing hiring since the late 1990s, a fact Trump has touted often in his speeches and tweets, but hiring in the sector dried up this year and is in danger of starting to contract. Economists are watching closely what happens to manufacturing employment when the Labor Department releases the September jobs report on Friday.

The strike at General Motors also probably contributed to the worsening manufacturing picture in September as 46,000 workers stopped working, forcing the major automaker to halt production in its facilities.

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The United States has experienced times in the past when manufacturing has fallen into a recession but the rest of the economy did not, including 2015-2016. Consumer spending, which powers most of the U.S. economy, did not pull back much then and remains healthy so far.

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Analysts warn that could change, however, if the “we’re hiring” signs that have been so prevalent in many communities begin to go away and Americans think their job prospects are declining.

In a Twitter post on Tuesday, Trump attempted to blame the Federal Reserve for any weakness in the manufacturing sector. The Fed has lowered interest rates for the first time in a decade in an effort to counteract the harm of Trump’s trade war.