The UK voted to leave the European Union, dealing a heavy blow to Europe’s 50-year effort to create a unified economic region and unleashing a hefty dose of economic uncertainty for Britain, Europe and perhaps the world economy in the months ahead. In reaction to the startling vote, the British prime minister announced that he would resign. Stock markets tumbled after the news. “The main impact will be massive disorder in the EU system for the next two years,” says Thierry de Montbrial, founder and executive chairman of the French Institute of International Relations. “There will be huge political transition costs, on how to solve the British exit, and the risk of a domino effect or bank run from other countries that think of leaving.”

The 3-month average of the Chicago Fed National Activity Index slumped to a four-year low in May, signaling that US economic activity continued to weaken at the mid-point in the second quarter. Even after the decline, the 3-month average is still above the level that marks a new recession. But the low reading suggests that further deceleration in the summer could mark the start of a new recession in the US.

Initial jobless claims in the US posted a substantial decline last week—close to a multi-decade low. “This data continue to point to a labor market that continues to be pretty solid,” says Ward McCarthy, chief financial economist at Jefferies LLC.

The US Manufacturing PMI rebounded modestly in the flash estimate for June. The chief economist at Markit Economics, which publishes the data, said the firmer reading is “welcome news.” The manufacturing sector “still looks to have acted as a drag on the economy in the second quarter, leaving the economy reliant on the service sector and consumers in particular to drive growth,” says Chris Williamson.

New US home sales fell sharply in May after posting a strong gain in the previous month. Despite the volatility of late, “the trend still looks upward,” opines Jim O’Sullivan, economist at High Frequency Economics. Year to date, new-home sales are up 6.4% vs. the same period in 2015.