Inflation Edges Up, Housing Starts Soar

NEW YORK ( TheStreet) -- Inflation at the consumer level in September ticked up 0.3%, in line with estimates, according to the Labor Department's consumer price index.

The rise in inflation follows a 0.4% uptick in August. The core rate, which excludes food and energy and is considered the most accurate gauge of inflation, edged up by 0.1%. Economists had expected it to tick 0.2% higher after similar growth in August.

Compared to September of last year, consumer prices have increased 3.9%. Prices of clothing and computers dropped, countered by gains in gas, tobacco, and cars. Gas prices alone surged 2.9% year over year.

Also this morning, the number of U.S. homes that builders began work on showed a surprise jump in September as demand for apartments grew from those looking to rent. The number of housing starts jumped 15%, according to the Commerce Department. The recent figures reverses the trend from August was housing starts dropped 7%..

Annually, housing starts rose to 658,000, compared to the 595,000 forecasted figure. August housing starts were upwardly revised by 1,000 to 572,000.

The gains in housing starts was overwhelming from multi-family homes, which surged 51.3% to a rate of 233,000. While single family starts rose 1.7%, the gain wasn't nearly as impressive.

Meanwhile, September building permits slumped 5%. Economists had expected building permits to decline to 610,000, from 620,000 previously. "Broadly speaking this set of data was a bit friendlier than anticipated," writes David Ader, strategist from CRT Capital, in a research note.

-- Written by Chao Deng in New York.

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