By Steven C. Johnson and Andy Bruce
NEW YORK/LONDON (Reuters) - U.S. manufacturing suffered its weakest quarter in three years and conditions at European businesses worsened, surveys showed on Thursday, while China's economy continued to lose momentum.
The data shed more light on the difficult task facing global policymakers, particularly in Europe and the United States, who have tried to boost economic growth with aggressive monetary stimulus.
There was little indication that the European Central Bank's plan announced earlier this month to buy the government bonds of troubled euro zone states has boosted confidence among service sector firms.
Financial information firm Markit said its U.S. "flash", or preliminary, manufacturing Purchasing Managers Index stood at 51.5 in September, unchanged from August. A reading above 50 indicates expansion.
The index averaged 51.5 in the third quarter, below the 54.2 registered between April and June, for its worst showing since the third quarter of 2009. At 51.2, the output component was the lowest since September 2009.
"The global situation is a restraint on the U.S. economy," said David Sloan, economist at 4Cast Ltd in New York. "Certainly, there is not going to be much growth in Europe. Growth in Asia, and China in particular, is slowing down, so U.S. growth is going to have to be domestically generated."
Export orders at U.S. factories fell for a fourth month running, with September's fall the steepest in nearly a year.
Separate data from the U.S. Labor Department showed the four-week moving average of the number of Americans requesting jobless benefits rose for a fifth straight week to its highest mark since June.
The Federal Reserve last week said it will hold interest rates at zero until mid-2015 and would buy mortgage-backed bonds monthly until the job market improves substantially.
EUROPEAN AND CHINESE MANUFACTURING STILL CONTRACTING
In the eurozone, Markit's composite euro zone purchasing managers index fell to 45.9 in September from 46.3, and Markit said it suggested the euro zone economy could shrink by roughly 0.6 percent in the third quarter ending this month.
"The fall in the PMI is another reminder that the ECB's new asset purchase program is not an answer to all of the region's problems," said Ben May, European economist at Capital Economics, in a research note. "The euro zone recession looks set to deepen in the latter part of the year."
Export-driven Asian economies struggled again in September.
The China HSBC manufacturing PMI inched up in September to 47.8 from August's nine-month low of 47.6, suggesting the world's second-largest economy remains on track for a seventh quarter of slowing annual growth.
"In order to convert hopes into reality and avoid an outright hard landing, the Chinese authorities have to step up again their accommodative efforts on both the fiscal and the monetary side," said Nikolaus Keis, economist at UniCredit.
China's economic slowdown is expected to reach its nadir this quarter, with a recovery of momentum delayed until the final quarter, leaving growth for 2012 likely to fall below 8 percent, a level last seen in 1999, a Reuters poll showed last week.
European Union and Chinese leaders are meeting in Brussels on Thursday leaders to try to bridge growing differences over trade and find common ground on tackling Europe's debt crisis.
MORE ECB ACTION EXPECTED
In Europe, manufacturers performed slightly better than economists had hoped. The downturn in Germany, the 17-country euro zone's biggest economy, also eased a bit this month, though the troubles for both French factories and service firms increased at a faster rate than expected.
Germany's PMIs beat even the cheeriest prediction from a sample of nearly 30 economists, though many advised caution.
"Whether or not that will last is the big question. We're not altogether hopeful about that," said Chris Williamson, chief economist at PMI compiler Markit.
The surveys backed the growing view that the ECB will cut its main interest rate at its next meeting in October, to a new record low 0.5 percent from 0.75 percent currently.
"Further macroeconomic stimulus - including a weaker euro and an ECB rate cut - is likely to be needed to put the region on a path of sustained growth and hence ensure the survival of (the euro zone)," said Martin van Vliet, economist at ING.
In Britain, which is suffering its own economic slump, retail sales ticked down in August driven by a slump in online sales as Britons watched the Olympics on television, data showed on Thursday.
(Additional reporting by Chris Reese in New York; editing by Clive McKeef)