housing starts fell again, no inflation, probably no interest rate hike

[still_one]

Housing starts fell for the fifth time in the past six months, dropping 6.0% in August. Meanwhile, the producer price index rose by 0.1% last month. Full article coming soon.

Core producer prices fell 0.4% in August on a slide in auto prices. Housing starts fell 6%, reaching the lowest point in since 2003. The easing inflation and slowing housing pictures give the Fed further reason to keep rates unchanged.

Short term this will be perceived as positive for the stock market and the economy because it lowers presurre on an interest rate hike.

I still see consumers out in the shopping centers. The question, has the consumer support of the economy been on the back of their increased debt, especially through home equity loans, refinancing, and increased credit card debt, and is the consumer tapped out. This will determine the direction of the economy

[MikeNearMcChord]

1. I wonder if the Christmas shopping season of 2006

May be the last of the big spending, or the beginning of consumer retrenchment. I would love to have the rolaids concession, at the headquarters of some of the retail companies.

[still_one]

3. In my mind the question is how much more debt can the consumer take?

[HereSince1628]

2. Anyone know how housing starts relate to shrinking incomes?

A few weeks ago there was a post here on DU with a map that showed much of the midwest losing earnings.

[Nimrod2005]

4. Probably need to lower interest rates SOON.....

[Javaman]

5. Link? nt

[still_one]

6. Wall street Journal

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