- THE MAGAZINE
The Labor Department said Tuesday that the decline in its closely watched Consumer Price Index was the first decrease since a 0.2 percent drop last November. The CPI had been up 0.3 percent in June and an even sharper 0.6 percent in May, reflecting big jumps in energy costs.
Meanwhile, the Federal Reserve reported that output at the nation's factories, mines and utilities rose by 0.4 percent in July, nearly erasing a 0.5 percent plunge in June. The increase was led by a sharp 1.2 percent jump in mining activity, a category that includes oil production, and a 0.6 percent rise in manufacturing activity, the biggest increase in this category three months.
In other good economic news, the Commerce Department reported that construction of new homes and apartments rose by 8.3 percent in July. The bigger-than-expected gain pushed housing construction to an annual rate of 1.978 million units last month, making up lost ground from a 7.7 percent decline in housing starts in June.
The rebounds in both industrial production and housing starts provided evidence that a slowdown in economic activity in June, which Federal Reserve Chairman Alan Greenspan termed a "soft patch" will not deepen into something worse.