Interest Rate Roundup

Thursday, January 18, 2007

Data flash: Hot CPI, Hot starts, Hot employment

Big data morning, and most of it is coming in "hot." Here's the quick and dirty recap ...

* The overall Consumer Price Index gained 0.5% against expectations for a 0.4% increase.

* The core CPI rose 0.2%, in line with expectations but also the biggest monthly gain since September. Price gains were widespread -- transportation, apparel, education/communication and other goods and services. Year-over-year core CPI is still far above the Fed's preferred range at 2.6%, though that is down from the peak of 2.9% in September

* Jobless claims dropped by 8,000 to 290,000 in the week of January 13 -- that's the lowest level in 11 months.

* Housing starts rose by 4.5% in December from November. Building permits climbed 5.5% on the month. Interestingly enough, single family home construction dropped 4.1% ... but construction of multifamily homes (townhomes, apartment buildings, etc.) vaulted 42%. The fall decline in interest rates helped stabilize sales at a low level, and that likely prompted builders to respond by picking up the pace of starts. Then there's the weather -- we haven't had a December as warm as last month since 1957.


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