The Institute for Supply Management reported Thursday that manufacturing activity in the U.S. dropped to 57.7 in October after a 59.8 showing in September. Meanwhile, the Commerce Department reported that spending on new construction projects was unchanged in the month of September.

Both sets of data could be signs that the U.S.-China trade wars is starting to affect the economy. During a press conference after announcing that the Federal Reserve is instituting a third rate hike in 2018, Fed Chair Jerome Powell said that monetary policy would not be affected by trade wars until raw data reflects necessary change.

“I think if you look at the aggregate performance of the U.S. economy, it’s hard to see much happening at this point,” said Powell. “You can look at it the other way and ask ‘If all the tariffs that have been announced are applied, what would be the affect at the aggregate level?’ They’re still relatively small.”

“Until we see it in the numbers, it’s hard to say how one would react,” added Powell.

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An Refinitiv poll of economists forecasted the ISM manufacturing index to come in at 59 for the month of October. According to Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, demand is still strong despite the latest number falling below economists’ expectations.

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