Global Shock: Manufacturing has begun to contract in the US and China for the first time since the Lehman crisis

Manufacturing has begun to contract in the US and China for the first time since the Lehman crisis, raising fears of a synchronized downturn in the world’s two largest economies.

The closely-watched ISM index of US factories tumbled through the “boom-bust line” of 50 to 49, far below expectations. It is the lowest since the depths of the crisis in mid-2009 and a clear sign that US budget cuts are starting to squeeze the economy. New orders plunged 3.5 to 48.8 on weak foreign demand and reduced federal contracts.The news came hours after HSBC said its index for China also fell below 50, a major inflexion point for the world’s industrial workshop. Global shock as manufacturing contracts in US and China - Telegraph