U.S. manufacturing activity grew for the first time in five months in June, thanks to strong exports, but the minimal growth came as inventories climbed and prices rose for every commodity except copper.

Strong exports helped U.S. manufacturing activity grow for the first time in five months in June. But the minimal growth came as inventories climbed and prices rose for every commodity except copper. The Institute for Supply Management on July 1 said that its manufacturing index came in at 50.2 for June, a reading that indicates growth in the sector. Wall Street reacted positively in early trading, but the excitement was tempered by the prices paid index - a guage of monthly price increases. That reading was up 4.5 points to 91.5. The highest reading since 1979.Construction spending meanwhile, fell four-tenths of a percent in May, the 11th drop in the past year. Residential construction dropped 1.6 percent, the 25th decline out of the past 26 months.

Analysts believe housing activity will keep falling as the backlog of unsold homes and increasing foreclosures will force even more properties onto the already glutted market.

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