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And a private survey of purchasing managers in China found that manufacturing in that country expanded for the first time after shrinking for three months. It added to other recent evidence that China's economy is stabilizing after a slowdown. Last month, a Fed report found that factory output dipped in July. But that slip reflected a slowdown in auto production, which many analysts expect to be only temporary. Companies also cut back in July on orders for long-lasting U.S. factory goods, according to a government report last week. That drop was driven by a sharp fall in demand for commercial aircraft, a volatile category. But businesses also sharply reduced their orders for capital goods such as computers, electrical equipment and other items. That decline may signal that business investment, an important driver of the economy, could slow. The economy grew at a modest 2.5 percent annual rate in the April-June quarter, the Commerce Department estimated last week. That was better than the government's initial estimate of 1.7 percent. But many economists now think the economy could slip a bit in the July-September quarter to a 2 percent annual growth rate or less.
[Associated
Press;
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