The Institute for Supply Management’s Manufacturing Report on Business was below 50% for the second consecutive month as it dropped -1.3% to 47.8%, reaching its lowest level since June 2009. Only the Supplier Deliveries index at 51.1% remained above 50%, indicating growth, with all other indices under 50%, indicating contraction. The lowest indices were New Export Orders (-2.3% to 41%), Backlog of Orders (-1.2% to 45.1%), and Employment (-1.1% to 46.3%). Indices for Prices (+3.7% to 49.7%), Imports (+2.1% to 48.1%), and New Orders (+0.1% to 47.3%) were all contracting, but at a slower pace than previously. Comments from respondents mentioned softening demand, a cautious business outlook, and the detrimental effects of tariffs and the on-going trade war.

The number of jobs created in August was revised upward from 130,000 to 168,000, and there were 136,000 jobs created in September, dropping the unemployment rate by -0.2% to 3.5%, the lowest rate since December 1969. However, average hourly earnings remained flat for the month, dropping the yearly gain in hourly earnings from 3.2% Y/Y in August to +2.9% in September. Jobs were created in health care (39,000), professional services (34,000), government (22,000), and transportation (16,000), but dropped for retail (-16,000) and manufacturing (-2,000). The number of workers holding multiple jobs held steady at 5.3% in September, up from 4.9% a year previously. The U-6 unemployment rate, which accounts for underemployed and discouraged workers dropped -0.3% to 6.9%, down from 7.5% a year previously.

Imports increased by $1.3 billion to $262.8 billion in August, outpacing a $0.5 billion increase in exports to $207.9 billion and widening the trade deficit by +1.6% to $54.9 billion. In goods exports, increases for fuel oil (+$0.8 billion), gold (+$0.4 billion) and soybeans (+$0.3 billion) were offset by a -$1.3 billion decrease in civilian aircraft. Goods imports were up for consumer goods (+$1.9 billion), and capital goods (+$1.9 billion), but this was offset by a ‑$1.5 billion drop in industrial supplies that was primarily due to a -$1.2 billion decline for crude oil and other petroleum products. The trade deficit with China narrowed by -$1.0 billion to $31.8 billion, with the year to date deficit at -$232 billion compared to -$261 billion for the year to date in August 2018.