Overview: Both the topline consumer price index and producer price index fell 0.1% in April.  The core CPI was unchanged while the core PPI rose 0.2%.  Building permits fell 11.5% in April.  Housing starts rose 5.8% in April. Stock markets declined sharply, with the Dow falling 4.5% for the week, while Treasury rates and the price of oil continued to decline. Initial jobless claims rose by 25,000 to a level of 471,000 for the week ended 5/15.

The topline consumer price index fell 0.1% in April; the core CPI was unchanged for the second month in a row. Over the past year, the topline CPI is up 2.3% while the core CPI has risen only 0.9%.  

The topline producer price index fell 0.1% in April—a smaller decline than expected.  The core PPI rose 0.2%.

Building permits surprised on the downside with a decline of 11.5% to an annual rate of 606,000 units in April.

Housing starts rose by a greater-than-expected 5.8% to an annual pace of 672,000 in April. This is the highest pace of starts since October of 2008.  

Stock markets experienced a steep decline, with the Dow closing the week down 4.5%, and down by over 1,000 points or 9.5% from its recent high of 11,205 on April 26th. Concerns about sovereign debt as well as the U.S. housing and labor markets’ recovery likely contributed to the decline.  

Both the 10-year Treasury rate and the price of oil continued their recent declines. Over the past four weeks, the price of oil has fallen by over $15, or 18% while the 10-year Treasury rate has declined by 62 basis points.   

Initial jobless claims unexpectedly increased by 25,000 to 471,000 for the week ended May 15th.