"Pretty grim," said Robert Macintosh, chief economist at Eaton Vance Corp in Boston. "It means we're in a recession, it's as simple as that...a pretty solid manufacturing recession...The question is how long or deep is it going to be? Where is this group of economists that is charged with declaring a recession? Why haven't they said anything?"
The industry report said its index of national factory activity fell to 38.9 in October from 43.5 in September. The level of 50 separates contraction from expansion, and a reading below 40 is exceptionally weak.
The data foreshadowed a grim outlook, with the index of new orders hitting its lowest since 1980.
Meanwhile, a separate report showed construction spending fell by a smaller-than-expected amount in September as a rebound in nonresidential activity helped offset further weakness in home building.
The Commerce Department says construction spending dropped by 0.3 percent in September, less than the 0.8 percent decline many economists had been expecting. Spending had been up by 0.3 percent in August after a huge 2.4 percent plunge in July.