It's The Economy Stupid: CPI, Housing Starts

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Consumer Price Index MoM	MAY	0.2%	0.1%	-0.4%
CPI Ex Food & Energy MoM	MAY	0.2%	0.2%	0.1%
Consumer Price Index YoY	MAY	1.4%	1.4%	1.1%
CPI Ex Food & Energy YoY	MAY	1.7%	1.7%	1.7%
CPI Core Index SA	MAY	233.255	233.267	232.879
Consumer Price Index NSA	MAY	233.057	232.945	232.531
Housing Starts	MAY	950K	914K	853K	856K
Housing Starts MoM%	MAY	11.4%	6.8%	-16.5%	-14.8%
Building Permits	MAY	975K	974K	1017K	1005K
Building Permits MoM%	MAY	-3.0%	-3.1%	14.3%	12.9%

 

So, how long do you think it will take Washington to stick the first knife in Bernanke’s back???

 

CPI

Consumer Prices in U.S. Increased Less Than Forecast in May - The cost of living in the U.S. rose less than forecast in May, restrained by the first drop in food prices in almost four years and signaling inflation remains under control.  The consumer price index was up 0.1 percent after falling 0.4 percent in April, the Labor Department reported today in Washington. The median forecast of 82 economists surveyed by Bloomberg News called for an increase of 0.2 percent. The core index, which excludes volatile food and fuel costs, climbed 0.2 percent as projected.  A recession in Europe and slower growth in emerging markets such as China, combined with restrained wage gains in the U.S., have made it difficult for companies to raise prices. The lack of inflation gives Federal Reserve policy makers, meeting today and tomorrow in Washington, more leeway to address unemployment as they consider whether to dial down their record monetary stimulus.

 

HOUSING STARTS

Beginning construction of new U.S. homes increased in May and permits to build single-family houses rose to a five-year high, extending a rebound that is helping shore up the expansion.  Housing starts climbed 6.8 percent, less than forecast, to a 914,000 annualized rate after a revised 856,000 pace in April, the Commerce Department reported today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for a 950,000 rate. Applications to build one-family homes increased 1.3 percent to a 622,000 pace, the fastest since May 2008.  Building permits that exceed the level of starts indicate residential construction will keep rising as improving job opportunities and historically low mortgage rates lure buyers. The recovery in residential real estate that’s spurred optimism among builders such as Hovnanian Enterprises Inc. shows how record monetary stimulus from Federal Reserve policy makers, who meet today and tomorrow, is bolstering economic growth.

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

225-342-0013

jbroussard@treasury.state.la.us