New figures show that US industrial output rose in July at its fastest pace in seven months as strong car production provided evidence that some factories were shaking off the disruptions caused by Japan's March earthquake.
Industrial output rose 0.9% last month, more than twice June's 0.4% gain, according to the Federal Reserve. Economists had expected a 0.5% gain.
The report indicates that US economic growth started the second half of the year on better footing than many analysts expected.
Japan's earthquake disrupted supply chains around the world and sent US car production tumbling in April. In July, manufacturing increased 0.6% during the month, with an index for motor vehicles and parts surging 5.2%.
Utilities also provided a boost to industrial production as extreme heat led Americans to crank up their air conditioning. Output at utilities rose 2.8% during the month, more than three times the rate of growth registered in June.
Rental demand limits US housing falls
Earlierl figures showed that US housing starts fell by less than expected in July as builders began work on new multi-family units likely to meet demand for rental apartments.
The Commerce Department said housing starts slipped 1.5% to a seasonally adjusted annual rate of 604,000 units. June's starts were revised down to 613,000 from the previously reported 629,000.
Economists had forecast housing starts to slow to a 600,000-unit rate. Compared with July last year, residential construction was up 9.8%.
A backlog of unsold homes and a weak economy are weighing down on the US housing market, whose collapse was the main catalyst of the 2007-09 recession. A large repossession pipeline also is not helping, leaving builders with little incentive to break ground on new projects.
But demand for rental properties, as Americans avoid homeownership because of plummeting home prices and a high jobless rate, is stemming further declines in home construction.
Last month, housing starts for multi-family homes rose 7.8% to a 179,000-unit rate, and ground-breaking for projects with five or more units was the highest since January. Single-family home construction - which accounts for a large portion of the market - dropped 4.9% to a 425,000 units.
New building permits fell 3.2% to a 597,000-unit pace last month. New home completions increased 11.8% to 636,000 units in July, the highest since June 2010.
