US factory output jumps

MANUFACTURING production in the US rose 0.9 per cent in May, fuelled by a 5.5 per cent rebound in motor vehicle output. The wider industrial output measure rose 1.2 per cent last month thanks to a 4.8 per cent weather-related jump in utilities output.

The continued recovery in the US manufacturing sector shows little sign of fading just yet but analysts are sceptical that this pace of growth can be maintained for much longer.

Less encouragingly, the number of new houses under construction slumped 10 per cent in May to 593,000. This was well below the consensus estimate of 648,000.

Analysts blamed the end of the tax credit earlier this year, which had pulled transactions and activity into the spring from the summer.