Economy

Construction sector stalls but US consumers more optimistic: Economy roundup

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Construction data released this morning has underlined the need for the RBA to cut interest rates to help support the rapidly slowing economy.

Construction data released this morning has underlined the need for the RBA to cut interest rates to help support the rapidly slowing economy.

Total construction activity fell 2.6% in the three months to 30 June, far bigger than the 1.5% fall most economists expected.

The major surprise in the construction data was a 6% fall in infrastructure activity, although this is likely to be one-off.

Overnight, consumer confidence from the US provided markets with a pleasant surprise. The data index measuring consumers’ mood jumped to 56.9 this month from July’s 51.9.

There were some other encouraging signs for the US economy. Sales of newly-constructed US single-family homes in July were lower than economists expected, but they rose the slowest in nearly 17 years, as recorded in June.

Another report said US home prices in metropolitan areas fell a record annual 15.9% June – hardly a great reading, but the decline has at least slowed from May, suggesting the decimated housing sector may be stabilising.

The Dow Jones Industrial Average was up 26.62 points, or 0.23% at 11,412.87 points.

The local sharemarket has been choppy this morning, jumping early, sinking sharply and then recovering to be steady for the day. The benchmark S&P/ASX200 eased 1.01 points to 5006.1 by 12:20pm AEST.

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