Manufacturing Index Shrinks

A measure of U.S. manufacturing activity contracted more than expected last month, hitting the lowest level since the aftermath of the Sept. 11 attacks, as new orders slowed dramatically. The Institute for Supply Management released a September reading of 43.5, the lowest since October 2001. The reading dropped from 49.9 in August, the largest one-month decline since January 1984, when it fell to 60.5 from 69.9. A reading above 50 signals growth. "The headline ISM has plunged into recession territory," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. Economists had predicted a much stronger reading of 49.5, according to the consensus estimate of those surveyed by Thomson/IFR. The index has been hovering on what economists call "the boom-bust" line for most of the year.