December's Housing Starts Tumble 4% While Food Costs Edge the PPI Up 0.2%
January 20, 2010 - According to the U.S. Labor Department, December's producer price index rose to a seasonally adjusted 0.2%, with a sharp increase in food costs.
While core producer prices remained unchanged for the month, it was food and energy costs that were the make and break figures of the index.
While food costs have increased for the past three months, including a 1.4% boost in December, energy costs dropped 0.4% to offset the gain.
In addition to the PPI, December's new home construction fell 4%, pulled down by a 6.9% drop in starts for single-family homes. Reaching 557, 000 units, housing starts were unexpectedly low for the month in comparison to November's 8.9% gain.
Groundbreaking activity also had a significant drop, totaling 553,000 units for 2009.
However, not since October 2008 have new building permits been as high as December's 653,000 units, rising 10.9% from November's data.