City A.M. Reporter
CONSTRUCTION of new homes in the United States hit a six month low in October, providing more evidence of the economy’s sluggish recovery, while a surge in the cost of new and used vehicles lifted consumer prices.<br /><br />The Commerce Department said housing starts dropped 10.6 per cent to an annual rate of 529,000 units, the lowest since April. It was the biggest decline in 10 months.<br /><br />The slump in activity is a blow to the housing market, which had shown signs of stabilisation after a three-year slump. <br /><br />Separately, the Labor Department said the Consumer Price Index rose 0.3 per cent last month as the cost of new vehicles rose by the most in more than 28 years. <br /><br />The increase in consumer prices was a touch above market expectations.<br /><br />But widespread price pressures were absent and analysts attributed the rise in vehicle prices to the now expired “cash for clunkers” scheme.