U.S. factory activity slows to six-month low, survey finds

U.S. manufacturing grew in April at its slowest pace in half a year as demand from American consumers dropped, raising worries that the econonoc recovery may be losing some steam.

New orders, output and employment in factories fell, pushing an index of factory purchasing managers to its lowest level since October, according to data firm Markit.

Economists say the effects of higher payroll taxes and sequestration may be prompting consumers to hold back on spending.

The report “raises concerns that the manufacturing expansion is losing momentum rapidly as businesses and households worry about the impact of tax hikes and government spending cuts,” Chris Williamson, Markit chief economist, told Reuters.

“The picture looks to have already begun to darken again,” he added.

Williamson said the report suggests that growth in output has fallen to an annual rate of 2% in the second quarter, a sharp decline from the 8% seen earlier this year.

Some experts say that the sequester, which went into effect March 1, will dampen overall economic activity in the second quarter and possibly beyond.

ALSO:

Utah, Virginia governors visit California to woo businesses

Los Angeles, San Francisco top cities for draft dodgers, study says

College graduates see pay drop 7.6% in the last six years, report says

Follow Shan Li on Twitter @ShanLi