With US inflation stabilizing in July, as the Federal Reserve had forecast, consumer prices only gained 0.2% -- the smallest increase in three months -- and a surge in utility improved industrial production. Lower energy costs could allow companies to keep retail prices from going up, and less inflation also means that the Fed can ease monetary policy further if the recovery falters.
The US housing market, however, is still depressed. It remains the economy's "weak link", as Bloomberg reports after its survey of 68 economists. Housing starts fell 4.6% to 600,000 in July, and the number of building permits dropped 1.9% in June. Sales of existing houses fell to a seven-month low in June but rose slightly in July.