U.S. manufacturing grew at a slower rate in July as a drop in new orders spawned caution among factory managers, and U.S. private employers probably added jobs last month at their slowest rate in four years, according to two reports Wednesday.
In the key housing sector, demand for mortgage applications slid last week to the weakest level in more than five months, an industry group said, suggesting the beleaguered U.S. housing sector has yet to hit bottom.
But in a bright sign for housing, pending sales of previously owned U.S. homes rose at their fastest pace in more than three years in June, a real estate trade group said.
"Manufacturing is showing some signs of at least a temporarily slowing economy here," said Andrew Richman, a managing director at SunTrust's personal asset management division in West Palm Beach, Florida.
But the economic news was taking a back seat to investor concerns about the subprime mortgage market, Richman said.
"If we saw home sales this strong without the subprime story going on, you would see bonds sell off," he said.
U.S. stock indexes swung wildly between positive and negative territory in Wednesday's session, with stocks falling on the data while the dollar was mixed. U.S. Treasury debt prices slipped on relative stability in global equities after Tuesday's rout.
The Institute for Supply Management said its index of national factory activity fell last month to 53.8, its lowest since March, and down from 56.0 in June.
Analysts had been looking for a more modest dip to 55.5, although any reading above 50 still points to expansion.
Consumer spending eased in the second quarter because of the housing sector's slump and rising gasoline costs. Analysts said factories could be responding to what might be perceived as a lack of demand.