LONDON/NEW YORK (Reuters) - U.S. factory output rebounded this month but hiring remained sluggish, while business activity across the euro zone and at China’s manufacturers slowed, surveys showed on Thursday.
The data underscored the fragile nature of the global recovery and the difficulties still facing the world’s biggest economies.
Manufacturing activity and output rebounded in the United States this month, according to the Markit “flash,” or preliminary U.S. Manufacturing Purchasing Managers Index, after hitting a one-year low in October.
But the overall pace of growth remained modest and “is barely generating any employment growth” in the sector, said Markit chief economist Chris Williamson.
While growth at German businesses picked up, activity in France tumbled, underlining the lopsided nature of the euro zone’s recovery from recession.
And patchy recoveries in developed countries are sapping demand for China’s manufactured goods. Overseas demand fell to a three-month low in November, bolstering views that the second largest economy in the world would lose steam this quarter.
“This is evidence to suggest the European economy is struggling to gain momentum and the Chinese numbers certainly were not great,” said Peter Dixon at Commerzbank.
“There will be an okay rebound in the course of the next year but not as strong as perhaps we once thought. A lot is going to depend on how the United States holds up.”
The U.S. economy grew more swiftly than expected in the third quarter and recent nationwide employment and retail sales data have been surprisingly strong as well, confounding economists who had expected more disruptions from a 16-day government shutdown in October.
But persistently low inflation remains a concern, and Markit’s Williamson forecast the manufacturing sector would contribute 0.6 percent to overall growth in the fourth quarter.
The 17-country euro zone, meanwhile, is still struggling to recover from its longest-ever recession, which ended this year.
Eurozone Composite Purchasing Managers’ Index (PMI), which combines manufacturing and services data and is seen as a good guide to growth, slipped to 51.5 from 51.9 last month, and suggests growth of around 0.2 percent in the current quarter, in line with the latest Reuters poll of analysts on Wednesday.
“In a nutshell, today’s PMI figures confirm that the euro zone economic momentum has lost some steam. The stabilization in domestic demand remains fragile and a solid recovery seems to be some way off,” said Annalisa Piazza at Newedge Strategy.
Non-euro-zone Britain’s finances showed an improvement last month as stronger economic growth and a recovering housing market boosted tax revenues, although it failed to live up to even the most pessimistic forecast in a Reuters poll.
The Chinese Flash Markit/HSBC PMI fell to 50.4 from October’s final reading of 50.9, but for a fourth consecutive month remained above the 50 line that marks expansion.
“Today’s PMI report underpins our view that Chinese economic growth momentum may have peaked in the third quarter. Looking ahead, we also stick to our assessment that growth will slow further next year,” said Nikolaus Keis at UniCredit.
A PMI index measuring new export orders fell to a three-month low of 49.4 in November from 51.3 in October, reflecting lethargic external demand.
Beijing has set an annual economic growth target of 7.5 percent for this year, which officials and economists have said is achievable, though the economy is firmly on track to post its slowest growth in 23 years.
China’s top leadership unveiled the boldest set of economic and social reforms in nearly three decades following a four-day conclave ended last week, which are expected to give the economy fresh drivers of growth.
“The optimism unleashed by China’s reform plan is today hammered by the reality of weaker economic data,” said Wei Yao at Societe Generale.
Additional reporting by Aileen Wang and Jonathan Standing in Beijing, Andy Bruce in London; Editing by Jeremy Gaunt and Chris Reese