Housing Starts, Inflation, Both Fall
The downturn in housing shows no sign of bottoming. Data released from the federal government this morning showed that housing starts in November fell to 625,000 on a seasonally adjusted, annualized basis -- a nearly 19 percent drop from the month before and the lowest start rate since recordkeeping began nearly 50 years ago. Building permits -- a measure of future activity -- fell to a seasonally adjusted annualized rate of 616,000, down 15.6 percent from the month before. Both housing starts and permits have fallen by half since November of 2007.
Inflation also took a record tumble, with prices dropping 1.7 percent in November on a seasonally adjusted basis, compared to the month before. Driven by the decline in the cost of fuel, the drop in prices is good news for consumers. But a sustained decline in prices can raise the risk of deflation and an even deeper recession.
-- Howard Schneider
Washington Post Editor
December 16, 2008; 8:48 AM ET
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