Trump attacks Fed as U.S. manufacturing index plunges to decade low
Trump and Jerome Powell. Photo: Drew Angerer/Getty Images
President Trump on Tuesday renewed his attacks on the Federal Reserve and Chairman Jay Powell, after a key U.S. manufacturing gauge signaled the second consecutive month of sector-wide contraction.
"As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!"
Driving the news: The ISM U.S. manufacturing Purchasing Managers’ Index fell from 49.1 in August to 47.8 in September, CNBC reports. Any reading below 50 is considered a contraction, with Tuesday's figure marking the lowest reading since June 2009.
- ISM Chairman Timothy Fiore said in a statement: "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."
The big picture: As Trump's trade war with China continues with no end in sight, the manufacturing sectors of the two countries are moving in opposite directions, Axios' Dion Rabouin notes.
- On Monday, China's Caixin purchasing managers' index, a private survey of the country’s manufacturing activity, had its strongest reading since February 2018.
- Meanwhile, the Chicago Business Barometer, which tracks Midwestern business activity steered mainly by trade and manufacturing, fell back into contraction in September.
- The ISM reading adds yet another data point to concerns that a recession may be on the horizon.