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U.S. homebuilder confidence unexpectedly improves, industry unexpectedly flat

Christian Fernsby |
Homebuilder confidence has unexpectedly shown a modest improvement in the month of July, according to the National Association of Home Builders.

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The report said the NAHB/Wells Fargo Index inched up to 65 in July after dropping to 64 in June. Economists had expected the index to come in unchanged.

"Builders report solid demand for single-family homes," said NAHB Chairman Greg Ugalde. "However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes."

The unexpected uptick by the housing market index reflected single-point increases by all three of the component indices.

The metric charting buyer traffic crept up to 48, while the component gauging expectations in the next six months and the index measuring current sales conditions inched up to 71 and 72, respectively.

With a steep drop in utilities output offsetting increases in manufacturing and mining output, the Federal Reserve released a report on Tuesday showing U.S. industrial production was unexpectedly flat in the month of June.

The Fed said industrial production was unchanged in June after climbing by 0.4 percent in May. Economists had expected production to edge up by 0.2 percent.

Industrial production was unchanged as utilities output plunged by 3.6 percent, with milder-than-usual temperatures reducing demand for air conditioning.

On the other hand, the report said manufacturing output climbed by 0.4 percent, partly reflecting a 2.9 percent jump in production of motor vehicles and parts.

Excluding autos, production rose by 0.2 percent and manufacturing output still declined by 2.2 percent annualized in the second quarter.

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