Producers Price Increase 1.2 Percent In July; New Housing Starts Decrease 11 Percent

Washington, D.C. (AHN) - Manufacturer prices in the U.S. went up 1.2 percent in July, according to the Labor Department which released the data Tuesday. On the same day, the Commerce Department said new housing starts declined by 11 percent.

The doubling of prices paid to American producers is a reflection of the soaring energy and commodity costs. In June, producer prices logged a 1.8 percent rise.

Although most of the prices were up compared to a year ago, the Labor Department pointed out commodity prices have started to go down. Oil prices have dipped 21 percent, copper 15 percent and corn 14 percent. The declining prices have helped ease the pressure on companies.

Stuart Hoffman, chief economist of PNC Financial Services, said the manufacturer price increase spells bad news for the U.S. economy. Hoffman told Bloomberg the numbers were an echo of July inflation.

Meanwhile, the Commerce Department said new home construction in July reached only 965,000, down from 1.084 million in June and the lowest volume since March 1991. But it was better than Wall Street economists forecast of 950,000.