Industrial production rises
The rise in industrial production was largely driven by activity in the automobile industry, with the Fed's "cash for clunkers" programme boosting activity in the sector. The rise was more than economists forecast and followed on from a -0.4% decline the previous month. General Motors and Chrysler have both returned from bankruptcy to benefit from the Fed's incentive.
US Consumer inflation figures were also flat for July, following a 0.7% increase in June. Producers are fighting for consumer dollars leading to a downward pricing cycle and low interest rates are helping to ease inflationary trends. In comparison to one year ago, consumer prices have fallen by 2.1%. This was largely driven by a 0.4% decline in energy and a 0.8% decline in gasoline.
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