clock menu more-arrow no yes mobile

Filed under:

The most worrying new survey for Trump has nothing to do with his polling

The manufacturing sector is contracting and analysts are blaming Trump’s trade war.

A jumpsuit man in a car manufacturing plant works on car doors suspended from a wall.
Workers assemble Ford vehicles at the Chicago Assembly Plant in June.
Scott Olson/Getty Images

New polling indicates a plurality of Americans not only support President Donald Trump’s impeachment but his removal from office. Meanwhile, amid a rapidly widening abuse of power scandal, Trump’s approval rating is hitting all-time lows.

But arguably the most troubling survey for Trump has nothing to do with impeachment or his approval rating.

The latest numbers from the Institute for Supply Management’s (ISM) closely monitored survey of the country’s manufacturing firms (the Purchasing Managers’ Index, or PMI) shows not only that manufacturing activity has contracted for two consecutive months, but that August was the lowest point for the sector since June 2009 — a time in which the economy was mired in the Great Recession.

As Vox’s Emily Stewart has explained, recessions don’t just spring into being — something has to happen that triggers them. But worries about an economic slowdown are never welcome for a president heading into an election year. That’s particularly true for Trump, who has trumpeted his ability to reinvigorate American manufacturing. And perhaps even worse for Trump is the fact that analysts are placing blame for the slide mostly at the feet of his trade war. From Investor’s Business Daily:

The ISM manufacturing index unexpectedly fell deeper into contraction, posting the weakest U.S. reading since the end of the last recession as a global slowdown and the U.S.-China trade war increasingly weigh on the sector ...

The Institute for Supply Management’s factory index slipped to 47.8 in September, the lowest since June 2009, according to data Tuesday [any number below 50 generally signifies contraction]. The figure missed all estimates in a Bloomberg survey that had called for an increase from August’s 49.1.

“We have now tariffed our way into a manufacturing recession in the US and globally,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, told CNBC, alluding to Trump’s tariff-heavy trade policy.

“There is no end in sight to this slowdown, the recession risk is real,” added Torsten Slok, chief economist at Deutsche Bank, in a note about the ISM numbers quoted in CNBC’s piece.

In another bad omen, following the release of the ISM number the Dow fell by nearly 300 points on Tuesday.

Trump has made bringing back manufacturing a centerpiece of his political identity

Both during his 2016 campaign and since his inauguration, Trump staked a lot of political capital on reviving the manufacturing sector in the US.

In fact, just over two years ago, Trump bragged about a high number in the same manufacturing index that’s now flashing warning signs.

And indeed, while job growth overall during Trump’s first two-and-a-half years in office lagged significantly behind Obama, Trump’s record in the manufacturing sector has truly been impressive. As of July, manufacturing was up more than 300,000 jobs over Obama’s pace during the first 30 months of Trump’s presidency compared to the final 30 months of Obama’s. But as Investor’s Business Daily notes, the latest ISM numbers suggest not only that those gains are being reversed but that more bad news is on the horizon.

[The ISM] employment measure dropped to the lowest since January 2016. That’s a worrying sign before a jobs report Friday that’s forecast to show private payroll growth remains subdued.

Trump responded to the ISM numbers on Tuesday by lashing out at one of his favorite targets of abuse: Federal Reserve Chair Jerome Powell.

But there is only so much the Federal Reserve can do to spur growth amid a world economy that’s feeling the strain from Trump’s trade war — one that is not only hurting China but is having ripple effects in major economies that do lots of business with China, such as Germany.

The Street reports that the US numbers follow “similarly weak readings in Europe and China for the month of September,” and come on the heels of a warning from the World Trade Organization about slowing growth released earlier Tuesday that cited “trade conflicts” and the role they play in “heighten[ing] uncertainty.”

To be clear, none of this guarantees that we’re heading into a recession. But if US manufacturing does continue to contract, this doesn’t bode well for Trump both in the short term and heading into 2020.

One of Trump’s central anti-impeachment arguments is that it would be ridiculous to impeach a president who is doing as good a job managing the economy as he is.

While Trump insists on taking full credit for a recovery that in reality began and continued throughout his predecessor’s term in office and resulted in him inheriting a healthy economy, low unemployment rates, and a strong stock market, so far he hasn’t hasn’t managed to pull his approval rating above the low 40s. The latest manufacturing numbers indicate that if he’s not impeached and removed from office before then, Trump’s economic record could go from being a strength to a weakness for him before November 2020 comes around.

The news moves fast. To stay updated, follow Aaron Rupar on Twitter, and read more of Vox’s policy and politics coverage.

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.