Builders increase home construction in April

WASHINGTON — Builders ramped up construction of new homes in April, suggesting that the market remains solid despite sluggish economic growth at the beginning of the year. Housing starts climbed 6.6 percent to a seasonally adjusted annual rate of 1.17 million units, the Commerce Department said Tuesday. The increase makes up for much of March's 9.4 percent drop in starts, a decline that partially reflected the volatile swings in residential construction on a monthly basis. Ground breakings are running ahead of last year's pace, largely because of a dramatic increase in the construction of single-family houses, especially in the Midwest and South. Relatively few existing homes are listed for sale, creating an incentive for developers to expand supplies through building during a period of low mortgage rates.

Industrial production jumps .7 percent for March

WASHINGTON — U.S. industrial production in April posted the biggest increase since November 2014 as utility output surged, the Federal Reserve said Tuesday. Industrial output — which includes factories, mines and utilities — rose 0.7 percent from March. It had dropped the previous two months. Fueling the improvement was utility production, which surged 5.8 percent in April. It was the biggest jump since February 2007. Demand for electricity and natural gas returned to more normal levels after unusually mild March weather. Factory output rebounded 0.3 percent, the most since January, helped by a solid increase in auto and machinery production.

Consumer prices post .4 percent April increase

WASHINGTON — U.S. consumer prices jumped in April by the largest amount in more than three years, reflecting a surge in the price of gasoline and other energy products. But outside of volatile food and energy, core inflation posted another modest gain. The Labor Department said Tuesday that overall consumer prices rose 0.4 percent in April after a 0.1 percent increase in March. It was the largest one-month advance since a 0.6 percent increase in February 2013. Core inflation was up 0.2 percent compared to a 0.1 percent March gain. Over the past 12 months, overall inflation is up 1.1 percent while core prices have risen 2.1 percent, both considered modest gains. The fact that inflation has remained low has given the Federal Reserve the flexibility to keep interest rates at ultra-low levels.

For April, food costs edged up 0.2 percent and are up a modest 0.9 percent over the past year. The 2.1 percent increase in core inflation over the past 12 months was led by a 6 percent rise in the cost of auto insurance over the past 12 months and a 3.7 percent increase in tobacco prices and a 3 percent increase in medical care. Areas posting smaller gains over the past 12 months include airline fares, which are up just 0.4 percent over that period and new care prices, which are unchanged over the past year.