It's The Economy Stupid: CPI & Housing Starts

Housing Starts:  658K versus economists estimate of 590K

 

Builders began work on more U.S. homes than forecast in September on rising demand for apartments and condominiums as more Americans become renters.

 

Builders began work on 658,000 houses at an annual rate, up 15 percent from August and the most since April 2010, Commerce Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for a 590,000 pace.  Multifamily home starts surged to the highest since October 2008.

    

Today’s report showed building permits dropped 5 percent to a 594,000 annual rate in September.

 

 

Consumer Price Index (Year on Year):  3.9% versus economist’s estimates of 3.9%

CPI (Month on Month): 0.3% versus economist’s estimates of 0.3%

Consumer Price Index Ex Food & Energy (Year on Year):  2.0% versus economist’s estimates of 2.1%

CPI Ex Food & Energy (Month on Month):  0.1% versus economist’s estimates of 0.2%

 

The cost of living in the U.S. rose in September at the slowest pace in three months, signaling a slight moderation in inflation, perhaps as Federal Reserve officials have

predicted.

 

The consumer-price index climbed 0.3 percent from the prior month, in line with the median projection of economists surveyed by Bloomberg News, a report from the Labor Department showed today in Washington. Excluding volatile food and fuel costs, the so-called core rose 0.1 percent, less than forecast and the smallest gain since March.

 

Companies like clothing retailer Gap Inc. and supermarket chain Safeway Inc. have said they are limited in how much they can raise prices to recoup raw materials costs as weak job and income gains squeeze consumers. With inflation less of a concern, Fed policy makers would have the flexibility to take additional steps should the world’s largest economy stumble.

 

Cooling demand “will likely translate into inflation moderation,” Lindsey Piegza, an economist at FTN Financial in New York, said before the report. “Heading into holiday

shopping, retailers are compelled to pull in customers rather than alienate shoppers with higher prices.”

 

The biggest drop in clothing prices since 1998, lower costs for used cars and trucks and the smallest increase in rents in four months led to the moderation in core prices last month.

 

Today’s report also suggested the estimated monthly payment for retired workers receiving Social Security benefits will rise 3.6 percent in 2012.

 

 

Boudin Chaud. Cous Cous Froide. Allons Tigres--Poussez Poussez Poussez

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury