Data on industry output, home building boost hopes

WASHINGTON - Hopes that the economy can sustain its recovery drew support Wednesday from news that industrial ouput rose for a seventh straight month and home construction hit a six-month peak in January. Analysts cautioned, though, that the gains in both sectors could falter if consumer demand weakens. The report on industrial production from the Federal Reserve showed gains in all three major categories: manufacturing, mining and utilities. It was the first such collective show of strength since August. Manufacturing output rose 1 percent, led by a nearly 5 percent gain in auto production. Manufacturing has been a big contributor to the early stages of the economic rebound. In the fourth quarter, for example, roughly two-thirds of growth came from a burst of manufacturing activity. Factories have been churning out goods for businesses that had let their stockpiles dwindle as a way to save cash.

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