Economy time machine sets back prices, home starts
-- Home Textiles Today, 11/19/2008 2:37:00 PM
Washington – Two federal agencies today made it official: the U.S. economy has stalled, turned back, and landed in the pre-color-television days.
For construction starts on new houses and apartments, it’s January 1959.
For consumer prices, welcome to February 1947.
Those are the milestones reached in October by two official measures of the U.S. economy.
In both cases, the meter has been slugged back to the very beginning of the statistical records. In other words, there has never before – since the Labor Department. records began in February 1947 – been a one-month drop of 1.0% in the seasonally adjusted Consumer Price Index.
And there has never before – since the Commerce Department started keeping residential construction records in January 1959 – been a month where the seasonally adjusted annual rate for new, privately owned housing starts was as low as the 791,000 units measured for October 2008.
That rate of housing starts was 4.5% lower than the revised September estimate – and a full 38.0% under the revised October 2007 rate of 1.275 million units.
Consumer prices fell in large part due to the crash in fuel prices – measured as an 8.6% drop in the energy index, and a 14% drop in gasoline prices.
Compared to one year ago, consumer prices are 3.7% above the October 2007 level. Meanwhile, the index “for all items less food and energy” is 2.2% above October 2007.
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