Manufacturing slumps for third straight month

Manufacturing slumps for third straight month
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U.S. manufacturing contracted for the third straight month in October, according to the Institute for Supply Management (ISM), which collects business data.

The ISM Manufacturing index came in Friday at 48.3 percent, an increase from September’s 47.8 reading, but it was the third consecutive reading below 50 percent, indicating a contraction in the sector.

"Comments from the panel reflect an improvement from the prior month, but sentiment remains more cautious than optimistic," said Timothy R. Fiore, who heads ISM's manufacturing business survey committee.

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Demand among customers was down, he said, and prices, productions and new orders were falling. Trade, he added, is one of the "most significant" issues facing manufacturing industries.

Groups opposed to the multifront trade war President TrumpDonald John TrumpGOP divided over impeachment trial strategy Official testifies that Bolton had 'one-on-one meeting' with Trump over Ukraine aid Louisiana governor wins re-election MORE has waged said the ISM numbers showed it was time to back down from the tariffs.

"Today’s news makes it more important than ever that the administration quickly finalize the Phase One deal with China, and then immediately begin to work toward a final deal that ends the trade war and removes all tariffs,” said Jonathan Gold, spokesman for Americans for Free Trade.

The news could temper exuberance from an unexpectedly strong report of 128,000 new jobs in October, which had been expected to come in considerably lower due to a strike at General Motors.

The state of manufacturing could have significant implications for Trump's political fate. He promised to rejuvenate the sector during his 2016 campaign, and manufacturing is overrepresented in key swing states such as Pennsylvania, Michigan and Wisconsin.

The news comes amid a general slowdown in economic growth. The economy grew at a rate of 1.9 percent in the third quarter, well below the 3 percent target the White House had set. Growth is expected to continue moderating in 2020, but economists put the chances of a full-blown recession at about one in three.