With the economy contracting, output by U.S. manufacturers slowed to a 26-year low last month, the Institute for Supply Management reported this week.

The Arizona-based trade group's manufacturing index for October dropped to 38.9 percent, down from 43.5 percent in September and its lowest reading since 1982. The monthly index is based on new orders, production, deliveries, inventories and prices as reported by purchasing and supply executives nationwide.

Also this week, the Commerce Department reported that factory orders fell by 2.5 percent in September, the second consecutive month of declines.

According to preliminary estimates, the U.S. economy shrank over the third quarter by the sharpest rate since 2001.