It looks like the US economy is losing momentum

While US manufacturing activity continues to grow, the pace is slipping.

Markit's flash manufacturing PMI unexpectedly fell to 53.4 in June, the lowest level since October 2013.

This was down from 54.0 in May. Economists were expecting a reading of 54.1. Any print above 50 signals growth.

"Manufacturers reported a disappointing end to the second quarter, with factory output growing at the slowest rate for a year-and-a-half," Markit's Chris Williamson said.

"While the survey data points to the economy rebounding in the second quarter, the weak PMI number for June raises the possibility that we are seeing a loss of momentum heading into the third quarter."

One of the big challenges continues to be the strong US dollar, which has made US exports more expensive for overseas buyers.

On the plus side, the labor market indicators remain bullish.

"Employment continued to rise, accelerating to show one of the strongest monthly gains since the recession, but the labour market tends to lag changes in order books," Williamson said. "Firms are therefore likely to start cutting back on hiring unless demand revives in coming months."