Posted: Wednesday, October 19th 2011 at 10:53am
Home starts up 15% in Sep.; consumer prices up, too
By The Associated Press
WASHINGTON - Homes were built in September at the fastest pace in 17 months and consumers paid more for food and gas last month, although inflation outside those volatile categories was tame.
The Commerce Department says builders began work on a seasonally adjusted 658,000 homes last month, a 15 percent increase from August and the most since April 2010. Still, that's roughly half the 1.2 million that economists say is consistent with healthy housing markets.
Single-family homes, roughly two-thirds of home construction, rose 1.7 percent. Apartment building surged 53.4 percent. Building permits, a gauge of future construction, fell 5 percent.
While home construction represents a small portion of the housing market, it has an outsize impact on the economy. Each home built creates an average of three jobs for a year and about $90,000 in taxes, according to the National Association of Home Builders.
The Labor Department says the Consumer Price Index rose 0.3 percent in September, below a 0.4 percent rise in August. Excluding food and energy, so-called core prices increased 0.1 percent, the smallest rise since March.
Inflation has worsened this year, after the cost of oil, grains and other commodities spiked in the spring. But economists expect price increases to moderate as weak growth lowers commodity prices.
Food prices rose 0.4 percent, pushed up by big increases in the dairy, cereals, and fruits and vegetables categories. Gas prices rose 2.9 percent, driving up energy costs 2 percent. Clothing prices fell sharply.
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