Consumers to buoy US economy as industry feels bite of cheap oil

Chris Papadopoullos
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THE STRONG dollar and cheap oil are hindering US industrial production, but optimism among home builders imply the economy is being buoyed by consumers.

Total industrial production dropped 0.2 per cent in May, according to figures published by the Federal Reserve yesterday.

New oil drilling declined, and manufacturers were hit by the strength of the dollar, which makes their exports more expensive.

“As this lacklustre performance continues, the view that manufacturing conditions are being adversely affected by the strengthening in the dollar gains ground,” said John Ryding from RDQ Economics.

The National Association of Home Builders’ (NAHB) housing market index rose to a score of 59 from 54 in May. Readings above 50 indicate more builders view market conditions as favourable than poor.

The results indicate “a growing optimism among builders that housing will continue to strengthen in the months ahead”, said NAHB chief economist David Crowe. He added: “At the same time, builders remain sensitive to consumers’ ability to buy a new home.”

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