A report on Monday showing that the National Association of Home Builders/Wells Fargo Housing Market Index fell one point to 13 in August had already told us that the US housing sector remains weak.
Tuesday's data confirmed that weakness but a rebound in industrial production in July suggests that the US economy maintained its recovery trend at the beginning of the third quarter. From Reuters:
New U.S. home building rose at a much weaker pace than expected in July and permits hit a 14-month low, though sturdy growth in industrial output implied the economy has enough strength to keep growing...
Housing starts rose 1.7 percent to a seasonally adjusted annual rate of 546,000 units, the Commerce Department said, but below market expectations for a 560,000-unit pace.
New building permits, which give a sense of future home construction, dropped 3.1 percent to a 565,000-unit pace last month, the lowest level since May 2009. Financial markets had expected a 580,000-unit rate.
Separately, industrial output jumped 1 percent last month after slipping 0.1 percent in June, the Federal Reserve said. Output gains were seen across the board, with automotive products surging 8.8 percent.
In a third report showed prices paid at the farm and factory gate rose 0.2 percent last month, pulled by higher prices for food and consumer goods, the Labor Department said.
The rise in producer prices in July was the first in four months, suggesting that inflation is not a problem for the US economy. The same cannot be said of inflation in the UK. From Reuters:
British inflation slowed in July as expected but stayed far above the 2 percent target, forcing Bank of England Governor Mervyn King to explain the overshoot in an open letter to the government for the third time this year.
The Office for National Statistics said the annual CPI rate eased to 3.1 percent from June's 3.2 percent -- the lowest since February but the eighth consecutive month that it has exceeded the Bank's 2 percent target.
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