Housing, Price Data Points to Sluggish Recovery

Softer-than-expected U.S. housing starts last month and a drop in prices paid at the farm and factory gate pointed to an anemic economic recovery, backing views that interest rates could stay low for a while.

A Commerce Department report on Tuesday showed groundbreaking for new homes rose 0.5 percent to an annual rate of 590,000 units in September, shy of forecasts for a 610,000 unit rate. August's figure was revised down to 587,000. For a graphic showing housing starts data, click on:

http://graphics.thomsonreuters.com/109/US_HSGSTS1009.gif

Separately, the Labor Department said its producer price index -- a gauge of prices received by farms, factories and refineries -- dropped 0.6 percent last month after rising 1.7 percent in August. Analysts had expected prices to hold steady.

"The expectations are for a very tepid economic recovery. The recovery is firmly in place, but I don't think that consumers are going to recognize this until we start to see job growth," said John Canally, an economist and investment strategist at LPL Financial in Boston.