Consumer prices were flat in October, as a fourth straight monthly decline in gas prices offset an uptick in food, medical and housing costs. The price of gas dropped 3%, while the cost of food edged up .1% – the smallest gain in four months. Housing costs rose .3% and medical expenses were up .2% .
Source: St. Louis Fed
In good news for the housing market, home resales rose in October to the highest level in over a year. Existing home sales rose 1.5% to an annual pace of 5.26 million units – the highest since September of last year. “Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth. Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases”, according to the National Association of Realtors. The inventory of existing homes for sale fell 2.6% to 2.22 million units – a 5.1 month supply at the current sales pace.
Source: St. Louis Fed
Also on the upside for the housing market, confidence among homebuilders rebounded this month, approaching the nine-year high hit in September, led by optimism about present and future sales of single-family homes.
On a less positive note, housing starts fell 2.8% last month to an annual pace of 1.01 million units, dragged down by a 15.5% drop in construction on apartments. On a more upbeat note, groundbreaking on single-family homes rose 4.2% to a 696,000 annual rate – the most since November of last year. And building permits jumped 4.8% to an annual pace of 1.08 million – the highest since June 2008. More homes were under construction in October than at any time since the end of 2008.
Industrial production slowed .1% in October, the second decline in the last three months, as a .2% gain in manufacturing was eclipsed by a 1.2% drop motor vehicle output – the third straight monthly decline. Mining output slipped .9%, and utility production fell .7%.