On a positive note, construction spending rebounded in July, rising 1.8% to an annual rate of $981.31 billion – the highest level in over five years. The gain was led by a 3.4% jump in spending on state and local government projects, and a 1.4% increase in private construction.
Also on the upside, US manufacturing grew in August at the fastest pace since March 2011, as production rose to the highest level in four years, and new orders rose to the highest level in ten years.
The service sector also saw faster growth in August, with activity hitting the highest pace since 2008.
The US trade deficit fell .6% in July to $40.5 billion, marking the smallest gap in six months. However, the trade deficit with China reached a record $30.9 billion, bringing the gap with China for the first 7 months of 2014 to a total $254 billion. The US buys 3.7 times more from China than China buys from the US.
The job market lost some momentum in August as the pace of hiring slowed. The economy created 142,000 jobs for the month, marking the smallest gain since December, and ending a six-month streak in which at least 200,000 jobs were added each month. The jobless rate fell to 6.1%, but that was due in part to the fact that more people gave up looking for work – the labor force participation rate fell to 62.8%.