America’s manufacturing industry suffered the sharpest slowdown last month since the depths of the global financial crisis, prompting calls for emergency rate cuts to avert a spiral into recession.

IHS Markit’s momentum gauge fell to the lowest since September 2009 as America’s fortress economy succumbed to fading fiscal stimulus and mounting damage from trade wars with China, Europe, and Mexico.

Chris Williamson, the group’s chief economist, said US profit margins are being squeezed. Manufacturers are cutting output and laying off staff. “Surging order book growth just a few months ago has now turned into contraction - the first such decline seen in the series’ 10-year history,” he said.

“There is still time for the US Federal Reserve to right the ship, but time is running out,” said Michael Darda from MKM Partners.

He said the yield curve for US Treasuries is inverting across every relevant maturity, flashing a red warning sign. "Long-cycle" indicators such as housing and car sales are already slipping into a deepening downturn.

“It's time for the Fed to take out an insurance policy with a 75-100 basis point rate cut. If the Fed sits on its hands and a full-blown recession gets underway, taking rates all the way back to zero may not be enough to revive growth. An ounce of prevention beats a pound of cure,” Mr Darda said.