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Factory data, auto sales in US improve, construction spending slips

Factory data, auto sales in US improve, construction spending slips

New Delhi : US factory activity expanded in June as new orders, output and exports rose, providing another sign that the country’s economic growth was regaining its footing after witnessing a decline early this year.

Auto sales were higher as June sales were strong due to the demand for pickup trucks and sports utility vehicles. On an annualized basis, the June industry selling rate came in at 16.66 million units, well below May’s sales pace of 17.45 million.

Ford Motor Co. and Fiat Chrysler reported June sales gains of 6.4 percent and 6.5 percent respectively, but General Motors, Toyota Motor Corp and Volkswagen all sold fewer vehicles.

According to the analysts, industry sales may have peaked in 2015 at 17.45 million units, but GM chief economist Mustafa Mohatarem still held out hope for another record year.

“Positive economic indicators like historically low interest rates, stable fuel prices, rising wages and near-full employment provide the environment for strong auto sales to continue in the second half of the year,” said Mohatarem.

The weaker construction data could prompt some economists to trim back their second-quarter growth estimates and could help reinforce the Federal Reserve’s view that there is currently too much uncertainty over global and US growth to raise interest rates in the near term.

The employment index rose to 50.4 in June from 49.2 in May, for its first reading over 50 since November.

US stocks rose after the ISM data, and major indexes all closed higher for the fourth day in a row to recover nearly all of their sharp losses in the wake of the Brexit vote.

The dollar fell against a basket of currencies as benchmark US Treasury yields fell, with the 30-year bond yield at its lowest since the 1950s.

The International Monetary Fund stated that uncertainty over Britain’s departure from the EU will dampen near-term global growth. It, however, remains unclear how much Brexit might affect the US demand. (ANI)