WASHINGTON - Work began on more U.S. houses in April than at any time in over a year and wholesale prices unexpectedly decreased, showing the economy is strengthening without stoking inflation, Business Week reports.
Permits fell last month by the most since December 2008, a sign homebuilding will pause after a tax-induced jump in sales boosted companies like D.R. Horton Inc. Rising raw-material costs aren’t making their way up production lines, the price report showed, underscoring why Federal Reserve policy makers project inflation will be contained.
“It’s encouraging to see starts gain some traction, but the decline in permits takes some of the luster off,” said Jonathan Basile, an economist at Credit Suisse in New York, who forecast the increase in construction and the drop in prices. “Inflation is subdued. There are cost pressures in the pipeline, but they’re not leaving the factory.”
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Source: Business Week