More figures from the US have pointed to a weakening of economic activity, with claims for unemployment rising by more than expected last week.
Other figures showed that factory activity in the important US Mid-Atlantic region plummeted in August, falling to the lowest level since March 2009.
Another set of figures showed that existing home sales unexpectedly dropped in July, while consumer prices increased at the fastest pace in four months in July, highlighting the challenges facing the Federal Reserve.
The Philadelphia Federal Reserve Bank said its business activity index dropped to -30.7 from +3.2 the month before, far below economists' expectations for +3.7. Any reading above zero indicates expansion in the region's manufacturing.
The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware. It is seen as one of the first monthly indicators of the health of US manufacturing leading up to a larger national report by the Institute for Supply Management.
US existing home sales unexpectedly dropped in July, as cancellations of pending contracts continued to depress buying activity. The National Association of Realtors said sales fell 3.5% from June to an annual rate of 4.67 million units. Compared with July last year, sales were 21% higher.
Initial claims for state unemployment benefits increased 9,000 to a seasonally adjusted 408,000, the Labor Department said. This was above economists' expectations for a rise to to 400,000.
Another report from the Labor Department showed that the Consumer Price Index increased 0.5% in July, the largest gain since March, after falling 0.2% in June. Petrol, which rose 4.7% after falling 6.8% in June, accounted for about half of the rise in CPI last month. But but core CPI - excluding food and energy - rose 0.2% after rising 0.3% in June.
The jobless claims data cover the survey week for August's US employment report. Claims dropped by 14,000 between the July and August survey periods, but there are fears that financial markets turbulence could have slowed hiring this month.
The Federal Reserve last week promised to keep interest rates near zero at least until mid-2013 to boost growth and said the outlook for inflation over the medium-term was subdued.
Given limited pricing power for producers as consumers grapple with a 9.1 unemployment rate, inflation is not regarded as a threat now for an economy which barely grew in the first half of the year.
Fears of a second recession, the loss of the nation's top-notch AAA credit rating from Standard & Poor's and the sovereign debt crisis in Europe have inflicted damage on global stock markets. That has hurt consumer confidence and may make businesses more reluctant to hire more workers.
Most analysts still believe, however, that the US economy will dodge another downturn. So far, data ranging from retail sales to industrial production suggest the economy found some momentum early in the third quarter after barely growing in the first half of the year.
