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Business Title: U.S. Industrial Production Rises More Than Forecast Production jumped twice as much as forecast in July, signaling manufacturing is shouldering a U.S. economic recovery that is showing signs of moderating in the second half of the year. Output climbed 1 percent as factories churned out more computers, appliances, automobiles and industrial machinery, the Federal Reserve said today in Washington. Another report showed work began last month on fewer houses than forecast. Increased business investment is propelling the gains in manufacturing, which accounts for 11 percent of the world’s largest economy. At the same time, a slowdown in consumer spending will reduce the need to rebuild inventories, while cooling growth overseas may limit exports, meaning the pace of expansion will probably moderate. “This is encouraging,” said Lou Crandall, chief economist at Jersey City, New Jersey-based Wrightson ICAP LLC, who correctly forecast the jump in output. “This is a welcome interruption in the softening trend of economic data. Factory output is still growing solidly.” Stocks climbed as Wal-Mart Stores Inc. boosted its earnings forecast for the year on growing sales overseas and Home Depot Inc. reported profit that beat analysts’ estimates. The Standard & Poor’s 500 Index rose 1.6 percent to 1,096.71 at 12 p.m. in New York. Treasury securities dropped, sending the yield on the benchmark 10-year note up to 2.63 percent from 2.56 percent late yesterday. Exceeds Forecast The median forecast of 74 economists surveyed by Bloomberg News called for a 0.5 percent gain in industrial production. Estimates ranged from no change to an increase of 1.2 percent. Output fell 0.1 percent in June, revised from a previously reported 0.1 percent increase. Factory output, which makes up 75 percent of all production, rose 1.1 percent last month after falling 0.5 percent in June. Utility output increased 0.1 percent after a 2.3 percent jump the prior month. Mining production, which includes oil drilling, rose 0.9 percent. Manufacturing got a boost from auto making as fewer factories shut for mid-year retooling. Output of motor vehicles and parts surged 9.9 percent in July after falling 2.5 percent a month earlier. Excluding autos and parts, manufacturing still increased 0.6 percent after declining 0.3 percent. “We’re seeing decent growth in manufacturing but anticipate that the pace will gradually slow down as we move forward,” said Kevin Logan, chief U.S. economist at HSBC Securities USA Inc. in New York. “We’ll continue to have positive economic growth. It’ll be a modest recovery.” ‘Unusual Uncertainty’ Cisco Systems Inc., the world’s largest maker of networking equipment, last week forecast first-quarter sales that missed analysts’ estimates. Chief Executive Officer John Chambers said the San Jose, California-based company was seeing “unusual uncertainty” and getting “mixed signals” about the health of the economy. Housing is among areas showing scant signs of rebounding. Work began on 546,000 houses at an annual rate last month, fewer than the 560,000 median estimate of economists surveyed by Bloomberg News and up 1.7 percent from June, Commerce Department figures showed today in Washington. Building permits dropped 3.1 percent to a 565,000 pace. Builders are struggling to drum up demand following the end of a government tax break, for which buyers had to sign purchase agreements by April 30 in order to qualify for up to $8,000, even as mortgage rates drop to record lows. No Rebound “The tax credit brought forward some demand, and now we’re in the middle of the payback,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, who forecast a 545,000 pace for starts. “We’re in a deep hole right now. There’s no sign that we’re about to climb out of it.” Construction of single-family homes fell in July for a third straight month to reach the lowest level since May 2009. The Obama administration will offer $1 billion in zero- interest loans to help homeowners who’ve lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas. The White House hasn’t made much progress in selling the stimulus plans to voters. Asked how their opinion of the stimulus has changed in recent months, respondents to a Bloomberg National Poll were divided almost evenly among those who say they had become more supportive, those who are less supportive and those who haven’t changed their view. Another report today showed wholesale costs increased in July for the first time in four months, easing concern the slowdown in growth will promote deflation, or a protracted drop in prices that hurts the economy. Wholesale Prices The producer price index rose 0.2 percent following a 0.5 percent drop in June, according to figures from the Labor Department. Fed policy makers last week left the overnight interbank lending rate target in a range of zero to 0.25 percent, where it’s been since December 2008. High unemployment, low inflation and stable price expectations “are likely to warrant exceptionally low levels of the federal funds rate for an extended period,” the central bank said, repeating language from every policy meeting since March 2009. Central bankers also said they will maintain their holdings of securities to prevent money from being drained out of the financial system, their first attempt to bolster the economy in more than a year.
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#1. To: Brian S (#0)
“The tax credit brought forward some demand, and now we’re in the middle of the payback,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, who forecast a 545,000 pace for starts. “We’re in a deep hole right now. There’s no sign that we’re about to climb out of it.” That is the money quote from your article Brian S.
Being a Democratic shill means you check your humanity at the door.
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