Something called the Institute for Supply Management's factory index "plunged" to 38.9% in October. In an email, economist Dean Baker of the Center for Economic and Policy Research tells us why this matters:
[The ISM index] is a pretty good measure of the direction of change in output in manufacturing. The current reading indicates that manufacturing output is falling sharply. That likely means many more layoffs and plant closings. It's pretty bad news.
The index, which used to be called the purchasing manager's index, is now at its lowest level since September of 1982. Numbers below 50% indicate that the economy is contracting. Newly minted economics Nobel winner Paul Krugman says the latest ISM number means "We need a government of national unity to deal with the economic crisis, starting at, oh, around 8:45 PM tomorrow."