Business costs up, housing starts plummet

In two negative pieces of economic news, the cost of doing business increased to a 26-year high while housing starts crumbled to a 17-year low. The producer price index rose 1.2% in July, despite a drop in energy prices. The increase follows a 1.8% gain in June. The index has increased 9.8% since July 2007, marking the largest increase since the 12 months ended June 1981. Core producer prices, which exclude the costs of food and energy, increased 0.7% in July, marking the largest monthly increase since November 2006. The core index rose 0.2% in June. On the home front, the number of home foundations that were poured fell 11% to a seasonally adjusted annual rate of 965,000 in July, according to data from the Department of Commerce. June housing starts were revised higher to an annual pace of 1.084 million units. Housing starts have fallen 29.6% over the past year. Permits for single-family homes fell 5.2% to a 584,000 pace, marking the lowest level since August 1982. Single-family home permits fell 41.4% in the past year. The number of single-family homes that were completed fell 7.2% to an annual pace of 791,000, the lowest level since March 1983.