National City’s DeKaser Says Housing `Searching for a Bottom’
Published on the Bloomberg Terminal on February 20, 2008
By Ken Prewitt and Tania Haas
Feb. 20 (Bloomberg) — Richard Dekaser, chief economist at National City Corp., comments on today’s reports on consumer prices and housing starts for January. He spoke in an interview from Washington.
The U.S. Labor Department reported consumer prices rose 0.4 percent from December, with costs excluding food and energy climbing 0.3 percent, the most since June 2006. The Commerce Department reported that builders started work on 1.012 million homes at an annual rate in January, close to a 16-year low.
On the report on consumer prices for January:
“Slightly worse than expected on inflation. As you know, I was looking for three-tenths on all items; we got four-tenths. Part of the surprise here was energy prices. Not that I didn’t expect them to rise, but they kicked in a little bit more.”
“However, I want to emphasize this is not just an energy story. If you scan throughout the other line items, things like medical care are also kicking in. Again, not a devastating report, but one that continues to remind us that inflation is not off the table, and we are not out of the woods on that front yet.”
On the report on housing starts for January:
“I would characterize it as modestly good news, not great news. Still at extremely low levels, but coming off of December when weather was less than agreeable. So, I think we are searching for a bottom here in housing starts activity. And this is consistent with that bottom beginning to take shape. It’s still too soon to call it a done deal, but it’s still starting to take shape.”
–With reporting by Vonnie Quinn in New York. Editors: JoAnne Norton, Joe Sabo.