Page 7 - at

U.S. NEWS A7
Thursday 17 September

US Financial Front:

American consumer prices fell 0.1 percent in August

Boston University student Ashley Babula, left, shops for back-to-school items with her mother, tion. economy. Over the past 12
Mary, at the CityTarget store in Boston. The Labor Department reported on consumer prices for “Despite many signs of months, overall prices are
August on Wednesday, Sept. 16, 2015. stronger growth — jobs, re- up just 0.2 percent, while
tail sales, auto sales, home core inflation is up a mod-
(AP Photo/Michael Dwyer) sales — there is very mild in- est 1.8 percent.
flation pressure,” said Jen- A key inflation gauge that
MARTIN CRUTSINGER cent in August after a small rates for the first time in nine nifer Lee, senior economist the Fed monitors is up just
AP Economics Writer 0.1 percent rise in July. Gas years. It watches consumer at BMO Capital Markets. 1.2 percent excluding
WASHINGTON (AP) — U.S. prices, which had been prices closely, and the lat- “This is a tough call for the food and energy over the
consumer prices edged rising for three months, est figures may add fuel Fed.” 12 months ending in July,
down in August, marking dropped 4.1 percent amid to arguments that inflation Steve Murphy, an econo- marking more than three
the first decline in seven the recent fall in global oil isn’t strong enough yet. mist at Capital Economics, years that inflation in this
months and fueled by a big prices. Economists said Fed poli- said the August report did index has been running
drop in gasoline prices. The report comes as the cymakers were caught not change his view that below the Fed’s 2 percent
The Labor Department said Federal Reserve begins two between evidence of a the forces dragging infla- target for inflation.
Wednesday its consumer days of meetings to decide strengthening economy tion lower are only tempo- Economists were evenly
price index slipped 0.1 per- whether it will raise interest and persistently low infla- rary. “The deflationary pres- split on a Fed move. Many
sure from low energy prices believe the central bank
and a strong dollar will be- will start pushing rates high-
gin to fade next year,” he er given that unemploy-
said. ment has dropped to a sev-
“Together with the fact en-year low of 5.1 percent,
that the economy is al- within the Fed’s target
ready very close to full range for full employment.
employment, this suggests But other analysts argue
that both wages and core that the Fed will wait to see
inflation will surprise on the how much impact recent
upside next year.” events such as a slowdown
Food prices were up 0.2 in China and financial mar-
percent last month, led by ket turbulence will have on
another surge in egg pric- the U.S. economy.
es. These analysts argue that
Core inflation, which ex- with inflation so far below
cludes volatile energy and the Fed’s target and mov-
food costs, rose a mod- ing lower due to a strong
est 0.1 percent in August, dollar and falling oil pric-
indicating cost pressures es, it is in no hurry to raise
remain a no-show in the rates.q

US homebuilder sentiment hits highest level since Oct. 2005

ALEX VEIGA Readings above 50 indi- first half of 2015, backed 2007. But supplies of new were running at a season-
AP Business Writer cate more builders view by relatively low mortgage and previously occupied ally adjusted annual rate of
U.S. homebuilders are feel- sales conditions as good, rates and solid job growth homes have been tight, 1.21 million homes in July,
ing slightly more optimistic rather than poor. The in- over the past two years. pushing up prices and lim- according to the Com-
about the housing market, dex has been consistently Employers added 3.1 mil- iting choices for would-be merce Department.
nudging their confidence above 50 since July last lion jobs last year and are buyers. This month’s builder index
this month to a level not year, reflecting a gradual on pace to add 2.5 million The latest builder index is was based on 306 respon-
seen since the high-flying rebound in sales of new jobs this year. Meanwhile, consistent with the NAHB’s dents.
days of the housing boom homes. unemployment has fallen forecast for the U.S. hous- Builders’ view of current
nearly 10 years ago. A measure of current sales to a seven-year low of 5.1 ing market to recover at a sales conditions for single-
The National Association of conditions and builders’ percent. steady, modest pace this family homes rose one
Home Builders/Wells Fargo view of traffic by prospec- Those factors have helped year. The trade association point to 67, the highest
builder sentiment index re- tive buyers rose this month. Americans feel more confi- projects that builders will reading since November
leased Wednesday rose But builders’ outlook for dent about their economic break ground on about 1.1 2005. A measure of traffic
this month to 62, up from sales over the next six prospects, causing them to million homes this year. To- by prospective buyers also
61 in August. The last time months declined slightly. return to the housing mar- tal housing starts have risen improved this month, rising
the reading was higher was Sales of new homes jumped ket that initially sparked 11.3 percent in the first sev- two points to 47. That’s the
October 2005 at 68. 21.2 percent through the the Great Recession in late en months of this year and highest level in a year.q