WASHINGTON -- US core producer prices barely budged last month and housing starts dropped, easing inflation concerns, but a strong gain in industrial output suggested price risks have yet to fully recede.
The Labor Department said yesterday overall producer prices rose a steep 0.9 percent in April, but prices outside of the volatile food and energy areas rose just 0.1 percent for the second consecutive month.
Separately, the Commerce Department said housing starts fell 7.4 percent in April to a 1.849 million unit annual pace. It was the third straight monthly drop, taking starts to their lowest since November 2004.
But in a sign of vigor, a report from the Federal Reserve showed industrial output rose by a greater-than-expected 0.8 percent in April, pushing the percentage of industrial capacity employed to its highest since July 2000.
The gain in the overall producer price index, a gauge of prices received by farms, factories and refineries, was the largest since September. It reflected a steep 4 percent rise in energy prices, underscoring the persistent price pressures stemming from lofty oil prices, which hit a record high last month. Gasoline prices shot up 12.3 percent, the biggest jump since October 2004.
However, the mild gain in the core index showed energy-related price pressures have yet to translate to big price hikes for most goods. While overall producer prices have risen a relatively steep 4 percent rise over the past 12 months, core prices are up just 1.5 percent.
In addition, permits for future groundbreaking, an indicator of builder confidence, dropped 5.4 percent to a 1.98 million unit pace.