US manufacturing activity softened in August. Activity in the US manufacturing sector slowed in August as strong demand for goods met with persistent capacity constraints and material shortages that choked output growth. The final reading of the US Manufacturing Business Activity Purchasing Managers’ Index for August came in at 61.1, data from IHS Markit showed on Wednesday. This is down from the 63.4 level registered in July, which was a record-high, and marginally below the preliminary estimate of 61.2. The reading broadly matched estimates from economists. "Not only were firms facing difficulties trying to clear outstanding work, they also faced further hikes in supplier costs," said Sian Jones, senior economist at IHS Markit.

US weekly jobless claims fall to new pandemic low. In its weekly jobless claims report released on Thursday, the US Department of Labour (DOL) revealing that claims fell to 340,000 from a revised total of 354,000 last week, slightly below estimates of 343,000 claims. It was the lowest number of weekly claims since March of last year, and it pointed to a continued recovery in the labour market. However, the DOL noted progress was not evenly distributed across states, some of which posted increases in weekly claims. Illinois and Florida experienced the highest increases in claims, which rose by 3,832 and 2,545, respectively.

UK house prices increase sharply in August. UK average house prices rose by almost £5,000 in August as the property market continued to boom after the partial end to the government’s stamp duty holiday in England and Northern Ireland. The Nationwide building society said that the cost of the average home increased by £4,628 to £248,857, a monthly rise of 2.1 percent – the second highest jump in 15 years. Despite expectations that house price inflation would cool after the threshold for paying stamp duty was lowered from £500,000 to £250,000 in July, year-on-year property inflation rose to 11 percent in August, up from 10.5 percent the previous month. Nationwide put the strength of the market in August down to a lack of properties for sale and buyers of homes worth less than £250,000 seeking to complete purchases before the stamp duty threshold reverts to its pre-crisis level of £125,000 in October.

China’s services sector contracts in August. China’s services sector fell into contraction territory in August, the latest survey from Caixin revealed on Friday, with a services Purchasing Managers’ Index (PMI) score of 46.7. That is down sharply from the 54.9 print reported in July and below the 50 level that separates expansion from contraction. Chinese services companies signalled a renewed fall in business activity during August, as rising Covid-19 case numbers at home and abroad impacted operations and demand. Notably, it was the first time that output and new work declined since April 2020.