Wholesale Prices Rise, Home Starts Fall in February
- Mar 18, 2008
Washington, D.C.–Home construction fell in February and future groundbreaking permits hit their lowest level in 16 years, according to data released Tuesday from the Commerce Department.Housing starts fell 0.6 percent to a seasonally adjusted 1.065 million annual rate, after rising 7.1 percent in January to 1.071 million, The Wall Street Journal reports.Originally, the Commerce Department had reported January starts were 0.8 percent more. Therefore, February’s 0.6 percent decline was a surprise–the drop was larger than expected but the construction pace was higher. Construction of housing with two units or more swelled 14.4 percent to 358,000; groundbreakings of multi-family homes with five or more units showed a 14.5 percent increase.Year-over-year, housing starts last month were 28.4 percent lower than the February 2007 level of construction. The Labor Department also said that the producer price index for finished goods increased 0.3 percent on a seasonally adjusted basis in February after a 1 percent rise the month before.The core index–excluding food and energy items–rose 0.5 percent last month, its highest increase since 2006. The increase, along with an 0.8 percent rise in wholesale energy prices, implies inflation is on the rise.Food prices, on the other hand, dropped 0.5 percent after increasing in January.