Posted: Friday, August 1st 2014 at 11:05am
Auto sales sizzle; manufacturing expands; construction spending falls; consumer spending up
By The Associated Press
Auto sales are up, manufacturing is continuing to expand, and consumer spending is up, but construction spending is down. Those are the highlights of several U.S. economic indicators which were released Friday.
US AUTO SALES SIZZLE IN JULY, HELPED BY DISCOUNTS
Big discounts helped keep U.S. auto sales sizzling in July.
General Motors, Ford, Nissan and Chrysler all reported big gains as the major automakers reported July sales Friday.
Industry sales were expected to rise 5 percent to 1.4 million, according to J.D. Power and Associates. That would make it the best July for the industry since 2006.
Generous summer discounts helped boost sales, said Jesse Toprak, the chief analyst at the car shopping site Cars.com. Toprak said the average price buyers paid fell 4 percent in July, while incentives were up 8 percent - or $216 per vehicle - over last July.
Automakers typically use summer discounts to clear out their lots before vehicles from the new model year start arriving in the fall.
US MANUFACTURING EXPANDS AGAIN IN JULY
US manufacturing expanded for the 14th straight month in July in a good sign for the overall economy.
The Institute for Supply Management, a trade group of purchasing managers, reported Friday that its manufacturing index rose to 57.1, highest level since April 2011 and up from 55.3 in June.
Anything above 50 signals that manufacturing is growing.
Paul Dales, senior U.S. economist at Capital Economics, wrote in a research note that the index was consistent with overall economic growth of 3.5 percent.
CONSTRUCTION SPENDING FALLS 1.8 PERCENT IN JUNE
U.S. construction spending fell in June by the largest amount in more than three years as housing, non-residential construction and government spending all weakened.
Construction spending dropped 1.8 percent in June on a seasonally adjusted basis after rising by a revised 0.8 percent in May, the Commerce Department reported Friday. It was the biggest setback since a 2.8 percent fall in January 2011.
The weakness was widespread with spending on housing down for a second straight month, falling 0.3 percent, while non-residential building activity fell 1.6 percent, the biggest decrease since January. Spending on government projects dropped 4 percent, the biggest decline in more than a decade.
US CONSUMER SPENDING UP 0.4 PERCENT IN JUNE
U.S. consumer spending rose at the fastest pace in three months in June, providing momentum for the economy going into the second half of the year.
Consumer spending increased 0.4 percent in June on a seasonally adjusted basis following slower increases of 0.3 percent in May and 0.1 percent in April, the Commerce Department said Friday.
That was the best showing since a 0.8 percent surge in spending in March, which reflected a rebound after a harsh winter had kept consumers from the malls and auto showrooms.
Consumer spending is closely watched because it accounts for two-thirds of economic activity.
Americans saw earnings rise 0.4 percent in June, matching the May increase. Income growth has lagged in this recovery but has shown recent signs of some acceleration.
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