- Dan Greenhaus, chief strategist at BTIG
The number of building permits issued in the U.S. increased significantly more than expected in July, adding to signs the housing market recovery rebounded after stalling in the second half of 2013. The U.S. Commerce Department said that the number of building permits issued last month advanced by 8.1% to a seasonally adjusted 1.052 million units from June's figure of 973,000. The report also showed that U.S. housing starts jumped by 15.7% last month to reach a seasonally adjusted 1.093 million units compared to June's total of 945,000, overshooting expectations for an increase of 8.6% to 969,000 units. The U.S. housing market is regaining its footing after being slammed by last year's run-up in interest rates. A shortage of properties for sale has also pushed prices higher, discouraging many first-time buyers.
Separately, another report showed that U.S. consumer prices rose in July at the slowest pace in five months, held back by a decline in gasoline prices. Consumer price inflation nudged up by a seasonally adjusted 0.1% following the 0.3% rise in June. On an annual basis, consumer prices increased 2% in July, meeting analysts' expectations, and down from the June's figure of 2.1%. Core CPI, which is considered by the Fed as a better gauge of long-term inflationary pressure as it excludes volatile food and energy components, rose at annualized rate of 1.9% in July. The central bank usually tries to aim for 2% core inflation or less.
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