The producer price index (PPI) for finished goods rose a seasonally adjusted 0.1% for the second straight month in August, the Bureau of Labor Statistics (BLS) reported on September 19. The 12-month increase dropped to 3.7% from a 4.2% rate between July 2005 to July 2006. But the PPI for construction materials and components rose 0.3% in August and accelerated to a 12-month rise of 8.8%, up from 8.3% between July 2005 and July 2006. By segment, increases ranged from 13.8% for highway and street construction inputs to 10.3% for “other heavy construction,” 8.6% for multi-unit residential, and 8% for nonresidential and single-unit buildings. Extreme increases occurred for a wide range of construction inputs: the 12-month change in the PPI for copper and brass mill shapes was 81%; asphalt paving mixtures and blocks, 38%; diesel fuel, 27%; steel mill products, 23%; gypsum products, 21%; plastic construction products, 20%; aluminum mill shapes, 16%; and concrete products, 10%. The only construction input to decrease in price over the past 12 months was lumber and plywood, -6.1%.

Existing-home sales fell for the fifth straight month, the National Association of Realtors reported today. Total existing-home sales-including single-family, townhouses, condos, and co-ops-slipped 0.5% in August at a seasonally adjusted annual rate and were 13% below the near-record August 2005 rate. The median sales price-the price above which half of the month's sales occurred-fell 1.7% compared to August 2005, the first year-over-year drop since April 1995 and a vivid contrast to the double-digit increases occurring early this year. The decrease in the median sales price for single-family houses was 1.2%; for condos and co-ops, 1.9%. Inventories of homes for sale at month's end climbed another 1.5% to a record 3.92 million. That represented a 7.5-month supply at current selling rates, the highest inventory/sales ratio since April 1993.