One more indicator of the troubled economy is the fact that manufacturing activity dropped precipitously in September, USA Today reports.

It did so at its swiftest pace in two decades, sinking to the lowest level since immediately after the 9-11 attacks.

A report by the Institute for Supply Management indicated sharp declines in manufacturing orders, production, employment and exports.

"If anyone doubted the U.S. economy was in recession, this report pretty much seals the deal," said PNC Financial Services economist Stuart Hoffman.

The institute said its index of activity in the factory sector fell from 49.9 in August to 43.5 in September — the lowest since October 2001.

When index numbers are above 50, that indicates an expansion in factory activity. Those below 50 suggest a contraction. The manufacturing index has stayed below 50 for six of the first nine months of this year.

Norbert Ore, chairman of the ISM manufacturing committee, told the newspaper: "Spending, whether it is business, consumer or government, is falling significantly. It's no surprise that would be reflected in manufacturing."

Hence, the index of new orders fell from 48.3 to 38.8 in September, production from 52.1 to 40.08, employment from 49.7 to 41.8 and exports from 57 to 52.

One piece of good news in the report: the index of prices paid by manufacturers for raw materials showed its largest one-month decline since the survey began in 1931.

But Daniel Meckstroth, chief economist at the Manufacturers Alliance, said: "The manufacturing industry has been in recession since October of 2007 and has seen moderate declines in production until recently. A broad-based and deep fall in the September report indicates that the energy shock, housing collapse and financial crisis has reached a point where the recession has spread to the general economy."

Sounds like Congress acted none too soon in passing the financial bailout package.