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Economy

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Consumer prices: They rose 0.5 percent in June compared with May, the biggest jump since February. However, two-thirds of the increase represented a surge in gas prices. Excluding volatile energy and food, consumer prices rose a modest 0.2 percent in June and are up just 1.6 percent over the past year, the smallest 12-month change in two years.
Builder sentiment: The National Association of Home Builders/Wells Fargo builder sentiment index jumped to 57 this month from 51 in June. It was the third consecutive monthly gain. The index hasn’t been this high since January 2006.
– Associated Press
The government said US consumer prices rose 0.5 percent in June, the sharpest rise since February.

Factories ramp up output a 2nd month

Associated Press photos
A trainee uses a device to control the fire in a mine disaster training center in Julian, Va. US factories boosted production for the second straight month in June.

– U.S. factories cranked out more business equipment, home electronics and autos in June, boosting manufacturing output for the second straight month. The gains suggest factories may be starting to recover from a slow start this year.

The Federal Reserve said Tuesday that manufacturing production rose 0.3 percent in June from May. That followed a 0.2 percent gain the previous month. Still, the two consecutive gains barely offset production declines in March and April.

Overall industrial production, which includes factories, mines and utilities, also rose 0.3 percent in June. Mining output increased 0.8 percent, while utility output slid 0.1 percent.

Manufacturing is the most critical component of industrial production. The recent gains are a hopeful sign that factories could help the economy grow in the second half of the year.

The report confirms the picture of a moderate recovery in the manufacturing sector, said Annalisa Piazza, senior economist at Newedge Strategy.

Manufacturers have struggled this year, providing little support to the economy. Their output is up just 1.8 percent over the past 12 months. And factories have cut jobs in each of the past four months, shedding 24,000 since February.

A key reason for the weakness is slower global growth has cut demand for U.S. exports. Europe is still in a recession and China’s economy grew from April through June at the slowest pace in more than two decades.

Manufacturing has shown improvement in Britain, France and Italy. Large Japanese manufacturers are also sounding optimistic for the first time in nearly two years.

There have been other positive signs that suggest U.S. factory production could increase in the second half of the year.

The Institute for Supply Management said that factory activity improved in June after hitting its lowest level in four years. But the closely watched manufacturing survey reported that employment fell to its lowest level since September 2009.

Factory activity in the New York region grew for the second straight month in July, according to the Federal Reserve Bank of New York’s Empire State manufacturing survey.

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