US July home building up

WASHINGTON: New US 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.

Yesterday’s mixed batch of data also showed a tick up in producer inflation last month, calming fears of deflation — an economically disabling, broad-based drop in consumer prices.

“This soft patch will be temporary. There are a lot of special factors — such as expiration of housing tax credits, firing of Census workers and the European financial crisis — which have caused this summer lull,” said Richard DeKaser, president of Woodley Park Research in Washington.

Housing starts rose 1.7% to a seasonally adjusted annual rate of 546,000 units, the Commerce Department said, but below market expectations for a 560,000-unit pace. — Reuters