Washington – Galloping energy prices, hotter industrial production and cooler housing activity are painting a mixed economic picture for Federal Reserve policymakers to ponder.
The latest batch of economic reports released Tuesday underscored the difficult crosscurrents Fed policymakers must wade through in charting the course of interest rates. A Labor Department report showed wholesale prices jumped by 0.9 percent in April, the most in seven months. The main culprit behind the rise: soaring costs for gasoline and other energy products.
Most other prices, though, were well- behaved. “Core” prices – excluding energy and food costs – that are closely watched by the Fed edged up by just 0.1 percent for the second month in a row.
That suggested that the spike in energy prices hasn’t fed into price tags of lots of other products.
For the 12 months ending in April, core prices were up 1.5 percent – a much tamer showing than the 4 percent rise in wholesale prices overall over the same period. A Commerce Department report, meanwhile, provided further evidence that the housing market – which racked up record-high sales for five years running – is losing steam.
The number of new housing projects builders launched in April dropped by 7.4 percent to a seasonally adjusted annual rate of 1.849 million units, the lowest level in 17 months.
A third report from the Federal Reserve showed industrial activity bounded ahead last month.
