Producer prices inch higher
Producer prices rose less than expected, though the Federal Reserve is still unlikely to raise interest rates in the near term, analysts say.
The Producer Price Index for final demand, a measure of all goods and services, inched up a seasonally adjusted 0.1%, the Bureau of Labor Statistics said Thursday. That's below the 0.2% consensus forecasts from analysts and comes a day after the BLS released data showing a leveling of consumer prices. On an annual basis, the producer index rose 2.6%, less than the expected 2.9%.
Meanwhile, prices for inputs to new residential construction — excluding capital investment, labor and imports — rose 0.2% in May, following a revised decline of 0.2% in April, according to a National Association Home Builders analysis of the data.
Producer prices, also known as wholesale prices, include all costs that companies incur in providing goods and services to customers. In real estate development, those include costs for building materials, energy and transportation services. Producer prices often can affect consumer prices in cases where companies decide to pass their own costs on to customers.
"Though inflation was tame in May and initial claims for unemployment insurance benefits have jumped in June, we don’t think this alters the Fed’s calculus yet," said Ryan Sweet, chief U.S. economist at Oxford Economics, in a statement.
Labor shortage cuts housing production
Since last year, the skilled labor shortage has had significant implications: about $11 billion in overall economic losses, including roughly 19,000 unbuilt single-family homes, a new study finds.
In addition, the effect of extended construction times due to the labor shortage totals $2.7 billion annually, according to the analysis from the Home Builders Institute in partnership with the National Association of Home Builders.
“This study underscores the urgent need for strategic interventions to address the skilled labor shortage," said Robert Dietz, chief economist for NAHB, in a statement. "The economic implications are vast, affecting not only the home building industry but also the broader economy.”
On Wednesday, builders and other industry professionals encouraged federal lawmakers in Washington, D.C., to support housing production. Among those initiatives, the builders group endorsed the CONSTRUCTS Act that would help prepare people for careers in construction and other trades.
Fannie Mae selects buyer for delinquent loans
Mortgage giant Fannie Mae found a buyer for a pool of 39 loans with nearly $7 million in unpaid balances.
VRMTG ACQ submitted the winning bid. The deal is due to close July 29.
Fannie said the loans are geographically focused in Florida. The mortgage giant said it requires bidders to honor any approved mitigation efforts, including loan modifications for borrowers.
