By John Parry NEW YORK (Reuters) - Factory activity fell in November to its weakest since the 1981-1982 recession, according to an industry report released on Monday. An inflation gauge within the report fell to its lowest in nearly six decades, as tumbling prices for commodities and an ebbing economy quashed inflationary pressures. The Institute for Supply Management said its index of national factory activity fell to 36.2 in November from 38.9 in October. It was the weakest since 1982 and was below economists' median forecast for a reading of 37.0. "This is another serious blow to manufacturing. Declines in demand are outpacing the declines in production," said Pierre Ellis, senior economist with Decision Economics in New York. New orders fell to the lowest since 1980, down to 27.9 in November from 32.2 in October. A reading below 50 indicates contraction in the sector. In another sign that inflation pressures are ebbing fast, the prices paid subcomponent fell to its lowest level since 1949, dropping to 25.5 in November from 37.0 in October. The prices paid index peaked this year at 91.5 in June. The report "emphasizes the general rapid slowdown in inflation. The economy is falling more sharply and to a greater depth than earlier perceived and the effect on prices is more immediate," Ellis said. "Price adjustment is what will ultimately bring the economy back but the immediate pain is severe," he said. Employment slipped to the lowest level since 1991, slipping to 34.2 from 34.6 in October. (Additional reporting by Ellen Freilich; Editing by Tom Hals)

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