Overview:  The Fed held constant its target for the federal funds rate at 0.0%-0.25%.  Housing starts rose 10.5% in August; building permits increased 1.8%; existing home sales rose 7.6%; and new home sales were unchanged.  Durable orders fell 1.3% in August; excluding transportation orders rose 2.0%.  Initial jobless claims rose by 12,000 to a level of 465,000 for the week ended 9/18.

The Fed held constant its target for the federal funds rate in a range of 0.0%-0.25%.  The Fed’s announcement included the following statements:

• Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.
• [The Fed] is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

Housing starts unexpectedly rose 10.5% to an annual pace of 598,000 units in August. Much of the topline increase was due to a 32.2% rise in the volatile multi-family homes component; single-family home starts were up 4.3% in August.

Building permits increased 1.8% to an annual pace of 569,000 units in August.

Existing home sales rose 7.6% to an annual rate of 4.13 million units in August. August’s gain follows a 15-year low reached in July.

New home sales were unchanged at an annual pace of 288,000 units in August.

Durable orders fell 1.3% in August; excluding transportation, orders were up 2.0%. A 4.1% increase in nondefense capital goods excluding aircraft (considered a good measure of capital spending by businesses) was seen as good news.

Initial jobless claims rose by 12,000 to 465,000 for the week ended September 18th.