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August 15th, 2008

US Economy Remains Consistently OK



US Industrial Production rose by a better-than-expected 0.2% in July, a mellow reading, yet still higher than recessionary numbers. Manufacturing gained 0.4% for the July, the best reading observed in 10 months. Strong showings in automobile production and mining canceled out a 1.9% drop in utilities. Motor vehicle output increased 3.6% for the month, recovering strongly from dismal numbers in the last couple of readings. Eliminating motor vehicle output, manufacturing rose just 0.1%, consistent with the year’s meager, yet positive readings.

The dollar is rising across the board, gaining strength as foreign economies begin to struggle. The dollar has risen 5% against the Euro in August alone, and rose against the yen this morning. If oil prices continue to fall, the dollar should strengthen even more.

Another improvement was seen in the University of Michigan Survey of Consumer Sentiment which reported a positive reading of 61.7 in early August, up 0.5 from late July, as lower gas prices have and will continue to improve consumer moods.

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2 Responses to “US Economy Remains Consistently OK”

  1. Stacey Derbinshire Says: August 15th, 2008 at 11:30 am

    I’ve been reading along for a while now. I just wanted to drop you a comment to say keep up the good work.

  2. Nontruths Says: August 16th, 2008 at 7:49 am

    The US is definitely resilient and its outlook has become a bit brighter lately…especially relative to key economies. Recently, Europe and Japan have slowed markedly (or even contracted), while the US continues to muddle along. The US has had the benefit of timely fiscal and monetary policy, and Europe Japan have (and probably will) not. So the US economy will likely emerge well before Europe and Japan; actually, Europe and Japan may tumble even further that the US, given that policy-makers’ hands are relatively tied.

    This is good for the US financial system. With weakening global economies, the USD will continue to appreciate, industrial production will move along, and consumer confidence will continue to represent less gloomy households. It’s all relative.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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