by Lucia Mutikani
WASHINGTON (Reuters) - U.S. homebuilding fell less than expected in January while permits surged to a near 13-year high, pointing to sustained housing market strength that could help keep the longest economic expansion in history on track.
Other data on Wednesday showed producer prices increasing by the most in more than a year last month, boosted by rises in the cost of services such as healthcare and hotel accommodation. The reports could support the Federal Reserve's desire to keep interest rates unchanged at least through this year after lowering borrowing costs three times in 2019.
“The economy looks good with residential home building activity beating expectations and a little more producer price inflation, even if the data overstate how well the country is doing in terms of generating the growth and inflation the Federal Reserve wants to see,” said Chris Rupkey, chief economist at MUFG in New York.Housing starts dropped 3.6% to a seasonally adjusted annual rate of 1.567 million units last month, the Commerce Department said. That followed three straight monthly increases.
Data for December was revised up to show homebuilding rising to a pace of 1.626 million units, the highest level since December 2006, instead of surging to a rate of 1.608 million units as previously reported. Read more.