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US economy struggles to impress over the summer

Jake Cordell
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Markets were left waiting for action after an unimpressive purchasing managers' index (PMI) score
Markets were left waiting for action after an unimpressive purchasing managers' index (PMI) score (Source: Getty)

Growth in the US remained sluggish over the summer, according to the latest economic indicator out of the world's biggest economy this afternoon.

The Markit purchasing managers' index (PMI), which tracks activity across the economy, came in at an uninspiring 51.5 in August, bang in line with expectations but down from 51.8 in July.

The news settled markets after they were rattled by a surprise crash in the slightly different non-manufacturing index released yesterday, which fell to a six-year low and sent the dollar tumbling 0.9 per cent against the pound and the euro.

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Weak figures on growth, inflation and employment in the US have pushed the chances of a rate rise into the distance, with markets now not pricing in action from the Fed until next year.

Markit, which compiles the figures, said: "There were some warning signs as new business growth eased markedly and hiring slipped close to stagnation."

The dollar was unmoved on the news, flat against the euro at €0.8899 and hovering around a two-month high of $1.34 against the pound.

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