Housing starts fell yet again in February, and building permits hit a 16-year low, Bloomberg reports. The annual housing start rate fell to 1.065 million homes, a 0.6% drop from January, while permits sank 7.8%, indicating still bigger declines to come. “We don’t see it bottoming out,” said one Wachovia economist. February’s starts beat estimates, but permits fell more than forecast.
In a separate report today, the Labor Department said producer prices excluding food and energy rose a more-than-expected 0.5%. But inflationary concerns will likely take a back seat when the Fed meets today, traders predict. “The recession in housing, which will now extend to nine quarters… means that inflation in the Fed’s mind is of secondary importance,” said one economist.