WASHINGTON - A fresh batch of sour economic reports yesterday sent bond market hopes for another round or rate cuts by the Federal Reserve soaring and fueled speculation that President Bush's chances of re-election are increasingly unlikely.

Analysts said they are as convinced as they can be that Fed officials will decide today to reduce the discount rate to 2.5% from 3% and trim the federal funds rate at least 25 basis points to 2.75% if the employment report for September shows continuing stagnation in the labor markets.

Some analysts, apparently a minority, said the Fed may old off until Tuesday's meeting of the Federal Open Market Committee to give Chairman Alan Greenspan time to build a consensus and assess market conditions. However, in the past the Greenspan Fed has eased monetary policy quickly on key reports of economic weakness.

"I think the Fed has a lot of good reasons to act and not too many not to," said Stuart Hoffman, senior vice president for Pittsburgh National Bank. "All of the arguments against the Fed doing something seem pretty hollow to me unless the employment report knocks the socks off [the market]."

But the September jobs figures, which mar the last employment report before the election, are not expected to bring much cheer to the Bush administration. "There is no economic momentum," said Mr. Hoffman. "The economic fat lady is clearing her throat for Bush."

The latest bout of pessimism about the economy came after the National Association of Purchasing Management issued a report showing the manufacturing sector contracted in September. The association's index tumbled to 49.0% from 53.7% in August.

A reading of 50% generally indicates that the industrial sector is expanding, and the decline below the critical midway point was the first since last February.

"Although the economy continued to expand in September, the manufacturing sector ground to halt," said Robert J. Betz, chairman of the association's business survey committee. "After maintaining a high level of growth for several months, new orders collapsed."

Other key measures also fell, according to the association's survey. The index for production fell to 52.6% from 56.4%, well below last year's peak of 62.9% and the slowest pace since January. The employment index dropped to 45.2% from 47.2%, the lowest reading since April.

Only six of 20 industries surveyed by the purchasing managers expanded in September.

Other government reports issued yesterday added to the evidence that the economy is on the verge of stalling.

The Labor Department reported that initial jobless claims for the week ended Sept. 19 jumped 15,000, to 429,000. And the commerce Department reported that construction spending in August slipped 0.8% as outlays for offices and other non-residential buildings plunged to the lowest level since January 1984.

Robert S. Robbins, chief market strategist for The Robinson-Humphrey Co. in Atlanta, said he has dropped his forecast that President Bush will win re-election. "He's a long shot now," said Mr. Robbins, adding that he expects to see "a doggy third quarter" with growth of around 1%.

"If Greenspan is smart, he'll concentrate on getting renominated by President Clinton, because Bush is a lost cause as far as I'm concerned," said Paul Getman, financial economist for Regional Financial Associates in West Chester, Pa.

Mr. Getman, whose firm specializes in analyzing economic trends in various regions of the United States, said the soft business conditions that persist in the Northeast and California appear to be spreading to the Midwest.

Mr. Getman said his analysis of statement employment data shows that Missouri, Illinois, Michigan, Ohio, and Oklahoma are all in recession. These states include traditional Republican strongholds and now show Arkansas Gov. Bill Clinton leading Mr. Bush in the polls.

"If you look at it state by state, the economies are sinking so quickly in some areas that people are saying the couldn't afford four years of Bush," said Mr. Getman.

"I think it's time to stop the pussyfooting around," he said. "Let the prime rate fall, let everything fall, because right now the only momentum in the economy is negative, and this could potentially lead us to another contraction in GDP by the first quarter."

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