Business Activity in U.S. Shrinks for First Time Since 2009

Business activity in the U.S. unexpectedly contracted in September for the first time in three years, adding to signs manufacturing will contribute less to the economic recovery.

The Institute for Supply Management-Chicago Inc. said today its business barometer fell 49.7 this month from 53 in August. A reading of 50 is the dividing line between expansion and contraction.

Uncertainties surrounding domestic fiscal policy and weakening economies in Europe and China may prevent companies from adding to headcount and ramping up production. Slow growth prospects prompted the Federal Reserve to announce more accommodation measures earlier this month in a bid to help spur the three-year-old expansion.

“It’s going to be hard for the economy to do a whole lot until households and businesses know exactly what’s going to happen,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report. “The likelihood that we accelerate in any meaningful way is probably low, and that goes specifically to manufacturing.”

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http://www.bloomberg.com/news/2012-09-28/business-activity-in-u-s-contracts-for-first-time-since-2009.html