Weak Housing Data And Inflation Of U.S. Lower March Rate Hike Chances
U.S. consumer prices unexpectedly fell in December as the cost of energy products and food declined, offering signs of weak inflation that further diminish expectations of a Federal Reserve interest rate hike in March. Other data on Wednesday showed a drop in housing starts and building permits last month, adding to weak reports on retail sales, industrial production, exports, inventory and manufacturing surveys that have suggested a significant slowdown in economic growth at the end of 2015. The Labour Department said its Consumer Price Index slipped 0.1 percent after being unchanged in November. The CPI was also weighed down by moderate increases in rents and healthcare costs. In a separate report, the Commerce Department said housing starts dropped 2.5 percent to a seasonally adjusted annual pace of 1.15 million units as ground breaking on both single- and multi-family projects fell.
Economists, however, saw last month’s weakness in home building as temporary, citing labour market strength and rising household formation.