Wednesday, May 16, 2007

New Economic Data

This week has already been a busy week for economists. Below are the key stats:

  1. Core CPI was up 2.3% from a year ago which was the slowest annual pace since April 2006. Most economists felt that this was a good number and many hope that if CPI continues to moderate the Fed will remove its tightening bias.
  2. Housing Starts unexpectedly rose 2.5% in April marking the third straight monthly increase, but are still off 16% from the year before.
  3. Housing Permits declined 8.9% in April, the worst drop since 1990. Permits are now over 40% off of their 2005 peak.
What can we take from all of this data:
"The economy is slowing, led by the housing sector. Core inflation appears to be moderating as the Fed has expected. If growth and inflation continue to fall the Fed should remove its tightening bias. The largest dangers remain the risk that the housing market grinds the economy to a halt or that inflation spikes up unexpectedly forcing the Fed to hold or raise rates going into 2008."

Posted by The La Jolla Guy at 5:15 PM

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