Prices up, home starts down in May

The producer price index, which tracks the inflation rate for wholesalers, increased 1.4% in May as the cost for food and energy continued to escalate, according to a Department of Labor report. Energy and food prices rose 4.9% and 0.8%, respectively, in May. The May increase in the PPI came on the heels of a 0.2% increase in April and marked the largest increase since the index rose 2.6% in November. The PPI has risen 7.2% over the past year. Economists surveyed by MarketWatch had expected the PPI to increase 0.9% in May. The core PPI, which excludes food and energy prices, rose 0.2% in May, in line with analysts' expectations. Core prices have risen 3% in the past year. According to a report from the Department of Commerce, U.S. home builders broke ground on 975,000 homes in May, a 3.3% drop from the 1 million housing starts recorded in April. That was short of the 980,000 new housing starts that had been expected by economists surveyed by MarketWatch. The number of single-family homes sold fell 1% to an annual rate of 674,000. Over the past year, housing starts have fallen 32.1%, and single-family housing starts have fallen 42.1%.