In further signs of a fitfully modest recovery, the economic data for Wednesday, June 16, showed a big drop in home construction and falling producer prices for wholesalers, but a rise in manufacturing activity.
Single-family housing starts in May stood at a rate of 468,000, 17.2% below the revised April figure of 565,000, the U.S. Census Bureau and the Department of Housing and Urban Development jointly announced.
Building permits for single-family houses in May were 9.9% below the revised April figure, at a rate of 438,000 compared to 486,000 in the previous month. Single-family housing completions in May were 7.8% below the April rate, at 507,000 compared to 550,000.
The housing numbers, which disappointed analysts’ expectations, took a hit because a federal tax credit of up to $8,000 for first-time home buyers ended on April 30.
Meanwhile, the U.S. Bureau of Labor Statistics’ May producer price index (PPI) for finished goods moved down 0.3%, signaling that inflation pressures stayed low last month. The index, a key indicator of inflation that shows how much manufacturers and wholesalers pay for goods, fell along with energy and food prices.