Manufacturing contracts

For those who are still wondering whether the US economy is in recession, the ISM tries to make things a little easier. From Bloomberg:

The Institute for Supply Management's factory index fell to 38.9 from 43.5 in September; 50 is the dividing line between expansion and contraction...

The reading for October was the lowest since September 1982...

October's ISM reading corresponds to a 0.7 percent annualized drop in GDP, the group said today. The export gauge dropped to 41, the lowest reading since records for this component began in 1988...
The U.S. purchasing managers' gauge of new orders for factories decreased to 32.2, the lowest level since 1980, from 38.8 the prior month. The production measure fell to 34.1 from 40.8.

The index of prices paid dropped to 37 from 53.5...

Job losses accelerated, today's report also showed. The employment index decreased to 34.6 from 41.8 in September...

The ISM report wasn't the only source of gloom on Monday.

... The Commerce Department said separately that construction spending fell for the eighth time in 10 months in September...

A record share of U.S. banks made it harder for companies to get loans in the past three months as they tried to avert losses from the financial crisis, Federal Reserve also said today based on results of a survey of loan officers at domestic and foreign banks conducted Oct 2 to Oct. 16.

Meanwhile in Europe, officials are making it a bit easier to recognise the recession. From Bloomberg:

The European Commission said the region's economy probably entered a recession this year and will stagnate in 2009, increasing pressure on political leaders to collaborate on measures to tackle the financial crisis.

Economic growth in the euro area will slump to 0.1 percent next year, the worst performance since 1993, the Brussels-based commission said today. It also estimated that gross domestic product will shrink for three consecutive quarters this year and cut its forecast for full-year 2008 growth to 1.2 percent from 1.3 percent previously.

This forecast comes as manufacturing in the euro area contracted at a record pace in October. Bloomberg reports:

Royal Bank of Scotland Group Plc's manufacturing index dropped to 41.1 in October from 45 in September. That's lower than an initial estimate of 41.3 published on Oct. 24 and the worst reading in the survey's 11-year history. The index is based on a survey of purchasing managers by Markit Economics in London and a reading below 50 indicates contraction.

Manufacturing also continued to contract in the UK, where the Chartered Institute of Purchasing and Supply/Markit purchasing managers' index came in at 41.5 in October, though this was slightly up from 41.2 in September.

And following a Chinese government release over the weekend showing manufacturing contracting in October, there was confirmation on Monday from another survey. Bloomberg reports:

China's manufacturing contracted by the most on record last month as the global financial crisis cut demand for exports, a second survey showed.

The CLSA China Purchasing Managers' Index fell to a seasonally adjusted 45.2 in October from 47.7 in September, CLSA Asia-Pacific Markets said today in an e-mailed statement...

The output index fell to 43.4 in October from 46.7 in September, while the index of new orders declined to 43.8 from 45.8. The index of export orders dropped to 44.3 from 45.9, CLSA said.