It is increasingly difficult for optimistic policy makers and traders to argue that the US economy hasn’t fallen into a recession through the third quarter. One clear signal that just such a fate has befallen the world’s largest economy was the sharp drop in manufacturing activity through September. The ISM survey for the health of the factory sector plunged much more quickly than expected with a 43.5 reading that easily outpaced the 0.4 percentage point decline to 49.5 that was forecasted. Historically, this is the worst level of the series since October of 2001; and all the fundamentals are there to support the malaise. A credit crisis has stalled investment while a global slowdown in growth has led all sectors to cut back on consumption and production. Looking into the breakdown of the report, there were few positives. The production component dropped more than 11 points alone to its worst readings since February of 2001. New orders plunged deep into negative territory with its worst figure since October 2001. And, an important number for Friday, the employment component similarly slid to levels not seen since October 2001. There is a common theme in these levels as it reflects both the last recession and the panic state that struck the US after the terrorist attacks in September of 2001.