U.S consumer prices barely rose last month, the latest sign that slow economic growth is keeping inflation tame.
The consumer price index increased just 0.1 percent in August, the Labor Department said Tuesday, after a 0.2 percent increase in July. Excluding volatile food and energy costs, core prices also rose just 0.1 percent.
In the past 12 months, prices have risen 1.5 percent. Thats down from the 2 percent year-over-year gain in July and below the Federal Reserves 2 percent inflation target. Core prices are 1.8 percent higher than a year ago, the largest 12-month gain since March.
The increase in core prices could help persuade the Fed to start pulling back on its low interest rate policies. But significantly lower inflation would pressure the Fed to keep stimulating the economy.
Most economists expect that the Fed will begin to reduce its bond buying by about $10 billion today, according to a survey by The Associated Press. The bond purchases are intended to lower longer-term interest rates and encourage more borrowing and spending.
Builders worry rates may slow home sales
U.S. homebuilders confidence in the housing market held this month at its highest level in nearly eight years. But builders are starting to worry that sales may slow if mortgage rates continue to rise.
The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday registered at 58 this month. Thats unchanged from August, which was revised down from an initial reading of 59.
Readings above 50 indicate more builders view sales conditions as good, rather than poor.
In the latest survey, which included 264 respondents, a measure of current sales conditions was unchanged, while a gauge of traffic by prospective buyers rose one point. But builders outlook for single-family home sales over the next six months fell three points.
Firms pay $14.4 million to settle SEC charges
Twenty-two investment firms are paying a total of $14.4 million to settle federal charges of improperly short-selling certain stocks and buying them soon after in public offerings.
The Securities and Exchange Commission announced the settlements Tuesday. One of the best-known is the hedge fund D.E. Shaw & Co., which agreed to pay $465,986 in restitution plus interest and a $201,506 penalty.
Short-selling is a bet that a stock will lose value. Short-sellers borrow shares and agree to sell them in hopes that the share price will fall. They can then buy the shares at a lower price, return them to the lender and pocket the difference.
SEC rules prohibit short-selling a stock in the five business days before a public offering and then buying that stock in the offering.
Area home sales up 1.8% in August
Existing home sales in the region increased 1.8 percent in August, compared with the same period a year ago, a report Tuesday from the Upstate Alliance of Realtors showed.
Upstate, which tracks data from Allen, Adams, DeKalb, Huntington, Noble, Wells and Whitley counties, said 696 homes sold last month, up from 684 in August 2012. The average August sale was $137,476, a 6 percent increase from $129,729 in the same month last year.