The words "contraction" and "deflation" go hand-in-hand.
With that in mind, a gauge of U.S. manufacturing from the Institute for Supply Management showed the sector contracted in August, its first decline since 2016.
Here's more from a Sept. 3 CNBC article:
The ISM U.S. manufacturing Purchasing Managers' Index fell to 49.1% in August, the lowest reading in more than three years. Any reading below 50% signals a contraction....
The August contraction ended a 35-month expansion period where the PMI averaged 56.5%, according to ISM. Production and employment gauges also showed contraction in August for the first time after growth for almost three years, ISM data showed.
The September Elliott Wave Financial Forecast mentioned other major global economies:
In July, the Chinese Producer Price Index fell 0.3% from July 2018. It was China's first PPI decline in three years. Year-over-year Chinese industrial output also fell dramatically to 4.8%, the slowest growth since February 2002. The world's third-largest economy, Germany, is officially contracting. German GDP slipped 0.1% in the second quarter.
You are encouraged to read the free report, "What You Need to Know Now About Protecting Yourself from Deflation."