US output hits quickest pace
Source: Agencies |
August 17, 2011, Wednesday
|
Print Edition
Print Edition
INDUSTRIAL production in the United States rose at its quickest pace in seven months in July as motor vehicle output rebounded strongly, further easing fears the economy could slide into recession.
Other data showed residential construction, while still depressed, was not a drag on the economy as the second half of this year got under way.
Industrial output rose 0.9 percent, the Federal Reserve said yesterday, after a 0.4 percent gain in June and well above economists' expectations for a 0.5 percent hike.
Manufacturing, which has been the economy's main pillar of support, rose 0.6 percent as motor vehicles production surged 5.2 percent after falling 0.9 percent in June.
"This report suggests that the recovery may have regained some momentum in recent months, and it could go some way in easing fears of an impending recession," said Millan Mulraine, senior macro strategist at TD Securities in New York.
The economy barely grew in the first half of the year, held back by high gasoline prices and supply chain disruptions from Japan in the wake of the March earthquake. The industrial production data indicated the Japan-induced disruptions to manufacturing were fading.
Data from the US Commerce Department showed housing starts slipped a less-than-expected 1.5 percent in July to a seasonally adjusted annual rate of 604,000 units as builders broke ground on new multi-family units to meet demand for rental apartments. Economists had expected a 600,000 rate.
But the housing market recovery continues to be hobbled by an oversupply of previously-owned homes.
"Housing starts remain somewhat range bound at historically low levels as homebuilders continue to reduce existing inventories of new single-family properties against a backdrop of elevated foreclosures," said Michael Gapen, an economist at Barclays Capital in New York.
A bloated inventory of unsold homes and a weak economy are weighing down on the housing market, whose collapse was the main catalyst of the 2007-09 recession. A large foreclosure pipeline also is not helping, leaving builders with little incentive to break ground on new projects.
Other data showed residential construction, while still depressed, was not a drag on the economy as the second half of this year got under way.
Industrial output rose 0.9 percent, the Federal Reserve said yesterday, after a 0.4 percent gain in June and well above economists' expectations for a 0.5 percent hike.
Manufacturing, which has been the economy's main pillar of support, rose 0.6 percent as motor vehicles production surged 5.2 percent after falling 0.9 percent in June.
"This report suggests that the recovery may have regained some momentum in recent months, and it could go some way in easing fears of an impending recession," said Millan Mulraine, senior macro strategist at TD Securities in New York.
The economy barely grew in the first half of the year, held back by high gasoline prices and supply chain disruptions from Japan in the wake of the March earthquake. The industrial production data indicated the Japan-induced disruptions to manufacturing were fading.
Data from the US Commerce Department showed housing starts slipped a less-than-expected 1.5 percent in July to a seasonally adjusted annual rate of 604,000 units as builders broke ground on new multi-family units to meet demand for rental apartments. Economists had expected a 600,000 rate.
But the housing market recovery continues to be hobbled by an oversupply of previously-owned homes.
"Housing starts remain somewhat range bound at historically low levels as homebuilders continue to reduce existing inventories of new single-family properties against a backdrop of elevated foreclosures," said Michael Gapen, an economist at Barclays Capital in New York.
A bloated inventory of unsold homes and a weak economy are weighing down on the housing market, whose collapse was the main catalyst of the 2007-09 recession. A large foreclosure pipeline also is not helping, leaving builders with little incentive to break ground on new projects.
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