The economy in the US expanded at a slower pace in the third quarter as firms took advantage of gains in consumer and business spending to reduce bloated stockpiles.

Activity in China’s factory sector shrank at its fastest rate in at least three years in August as domestic and export orders tumbled, increasing investors’ fears that the world’s second-largest economy may be lurching toward a hard landing.

The US economy grew faster than initially thought in the second quarter on solid domestic demand, showing fairly strong momentum that could still allow the Federal Reserve to hike interest rates this year.