Harsh weather continued to weigh on the housing market in February as construction on new homes fell slightly. However, future construction showed a big upswing as the temperatures rise across the nation. The Commerce Department reported that Housing Starts were steady last month rising to an annual rate of 907,000, below the 915,000 expected. Building Permits, a sign of future construction, surged by 7.5% to 1.018 million units, well above the 955,000 expected, but the big increase was concentrated in multiple-family dwellings.
Rising food prices were a key factor as consumer prices rose slightly in February. The price of food jumped by 0.4%, the biggest jump since September 2011, due to higher costs for meat, poultry, fish and vegetables. The Consumer Price Index (CPI) was up 0.1% last month, lower than the 0.2% that was expected. The Core CPI, which strips out food and energy, was up 0.1%, below the 0.2% estimated. The year-over-year Core rate remained at 1.6%, well below the Fed's upper target of 2%.
The two-day Federal Open Market Committee meeting will begin today and end on Wednesday with the monetary policy statement being released at 2:00pm ET. Federal Reserve officials will discuss monetary policy and how much impact the harsh winter weather has had on the U.S. economy. There will be no change to the Fed Funds Rate, currently at 0.25%, but the members will most likely continue to taper its massive Bond buying program, which is geared towards stimulating both the labor markets and economic expansion.
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