Inflation Steady, Housing Construction Up And Factory Production Increasing: Reports

By John Carter, MNI

WASHINGTON, DC — Inflation for U.S. consumers held steady in July, construction on new houses increased and factory production grew, according to three major economic reports released Tuesday that all signaled good news for the nation's economy.

Tuesday's combination of prices, housing and factory data added up to another good chapter in the unfolding story of an advancing economy that continues to make progress. The prices data is particularly good news for households, which are only now seeing some small pickup in wages.

The Consumer Price Index — a national standard for how much the average costs of basic goods such as gas, clothes and food are changing — was a flat zero percent for July following four straight months of growth, according to the Labor Department, meaning prices were largely unchanged across the board.

American shoppers found on average that retail prices remained flat overall last month as gasoline got cheaper for the first time in five months, helping to offset small increases elsewhere.

The Consumer Price Index report showed prices of food and clothing stayed the same, while rents and prices of new vehicles increased slightly. Overall, the annual consumer inflation rate is running at less than 1 percent. Without considering food and energy costs, inflation is up 2.2 percent this year.

The second major economic report, from the Commerce Department, said July housing starts increased 2.1 percent, showing that the housing recovery is still in good shape. Housing starts measure the number of new homes on which construction has begun.

Construction on new houses was beginning at a rate of 1.21 million units a year in July, which was more than expected. Housing experts say that's still not enough to keep prices from being pushed up by lack of supply, but it reflects steady improvement.

The third report Tuesday showed U.S. industrial production rose 0.7 percent in July, the largest increase in a year, a sign that factories are also doing better than expected.

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