Inflation Tame, Housing Starts Mixed

The Labor Department reported that U.S. consumer prices rose 0.1 percent in February for the second straight month and that the annual rate of inflation dropped from 1.6 percent in January to just 1.1 percent last month, one of the lowest rates since 2009.

Falling energy prices were the primary reason for the overall price decline as this index fell 0.5 percent after a gain of 0.6 percent the month before, but food prices rose in February, up 0.4 percent after gains of 0.2 percent and 0.1 percent in prior months.

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Also this morning, the Commerce Department reported(.pdf) that housing starts came in just below expectations, but permits for new construction (a key leading indicator for the home building industry) surged in what was a hopeful sign for the housing market this year.

Housing starts fell from an annual rate of 909,000 in January to 907,000 in February and permits jumped 7.7 percent to a rate of 1.018 million after dropping 4.6 percent in January.

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