- The CPI Ex Food & Energy for July rose .1% versus estimates of a .2% gain and a .1% rise in June.
- Housing Starts for July rose to 2042K versus estimates of 2025K and an upwardly revised 2045K in June.
- Building Permits for July rose to 2167K versus estimates of 2100K and an upwardly revised 2132K in June.
- Industrial Production for July rose .1% versus estimates of a .5% gain and a .8% rise in June.
- Capacity Utilization for July fell to 79.7% versus estimates of 80.3% and 79.8% in June.
BOTTOM LINE: Prices paid by US consumers rose the most in three months, paced by surging fuel costs, Bloomberg reported. Excluding energy and food, the increase was less than expected, signaling fuel costs have yet to stoke inflation. Moreover, new car prices fell 1.0%, the largest decline since January 1975. As well, the cost of clothing fell .9%, the most since April 2001. Finally, computer prices fell 1.5% for a third consecutive month and are 16% cheaper than at this time last year. I expect inflation to remain contained in the intermediate-term and disinflationary trends to reassert themselves next year.
US Housing Starts fell .1% in July from a four-month high in June and building permits surged to the highest level in 32 years, suggesting demand for new homes is holding up as jobs increase and builders plan more communities, Bloomberg said. Starts rose the most in the Midwest, surging 9.1%. Starts fell in the South, declining 5.4%. I continue to believe home price appreciation is in the process of moderating, not plunging.
US industrial production rose by a less-than-expected .1% in July, as automakers GM and Ford cut production to sell inventory accumulated earlier in the year, Bloomberg reported. I expect industrial production to snap back next month as plant re-toolings wind down and automakers seek to boost inventories.