Housing Starts May Stay Above Year’s Average
Key economic reports this week are expected to show that home construction in October stayed above this year’s average as builders worked to keep pace with record demand that has been a linchpin for the economic recovery. Meanwhile, prices consumers pay for goods and services probably rose slightly.
Housing starts, which will be reported Wednesday, probably ran at a 1.71-million-unit annual rate last month, based on the median of 36 forecasts in a Bloomberg News survey of economists. That would be down from the record 1.843 million pace the Commerce Department reported for September and faster than this year’s average 1.699 million, fueled by record-low mortgage rates.
The October consumer price index probably rose 0.3% last month after a 0.2% rise in September, economists expect the Labor Department’s report Tuesday to show. Services such as PacifiCare Health Systems Inc. and automobile insurer Geico Corp. have raised prices in an environment in which competition or weak demand has kept companies in most industries from doing so.
With economic growth “now slowly reaccelerating in response to monetary accommodation, inflation should bottom late this year,” said Mickey Levy, chief economist at Banc of America Securities in New York. “The chances of general deflation emerging in the U.S. remain low.”
Consumer prices excluding food and energy probably rose 0.2% in October after a 0.1% rise.
On Thursday, the Conference Board is likely to report that its index of leading economic indicators fell in October for a fifth straight month amid lower consumer confidence and stock prices. The 0.1 decrease would follow a 0.2 decline in September.
Sluggish demand is restraining manufacturing. A minus 3 reading for the Federal Reserve Bank of Philadelphia’s November manufacturing index is expected, suggesting declining factory activity. In October, the index was minus 13.1.
Also Tuesday, the Commerce Department probably will report that the nation’s trade deficit in goods and services narrowed to $37.3 billion in September from $38.5 billion in August.
