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Amid the anxieties in Europe, concerns about the US economy were compounded when the service sector survey was weaker than expected and other data showed a fall in factory orders in June.
"However, while PMI data had also indicated a sharp fall in factory output in July, the surveys have since shown a strong rebound in August as the initial shock of the EU referendum passed.
Fears that the UK could slide into a triple- dip recession grew on Friday after a surprise fall in factory output, which sent the pound tumbling below $1.50 for the first time in more than two years.
There was a 0.5% fall in factory output per hour in the second quarter, bucking the improving trend for the wider economy, according to the Office for National Statistics ONSS).
Disappointing readings from other indicators, such as the 0.2% drop in retail sales and the 1.4% fall in factory orders in the second quarter, plus the lowest Manufacturing PMI for three years in July, suggests that the US economy has lost considerable growth momentum so far this summer.
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Even China witnessed a sharp fall away in factory activity in May.
European stock markets have fallen deeper into the red, following the disappointing fall in eurozone factory output.
A more alarming omen is the 8% fall in German factory orders in September, led by weak foreign demand.Another likely casualty is capital spending at home by consumer-goods firms, which may now think they have too much capacity.
World First (@World_First) Biggest fall in UK factory output for 16 months in May July 8 , 2014Michael Hewson (@mhewson_CMC) Disappointing manufacturing and industrial production data - - Wow - that's a surprise #gbp July 8, 2014 On an annual basis, UK manufacturing output was up 3.7% in May, down from 4.3% in April.
Auto sales, consumer spending in general, home construction, a slight pickup in factory orders, falling energy prices -- all suggest to them that the economy is beginning to rebound, and by late summer or early fall job loss will turn to job creation.
Hard on the heels of a downgrade of its growth forecasts from the US Federal Reserve came a serious of disappointing economic figures including a third monthly fall in producer prices and declines in factory activity in New York and the mid-atlantic.
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