This Week's Economic Roundup

Producer prices experience sharpest gain in more than 30 years; personal income increases in third quarter.

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The nation's producers are paying higher prices for materials, while homebuilders appear to be shaking off the recent downturn in the housing market and are looking ahead to the new year. Here's a look at this week's economic developments and how they may impact your business.

Producer Prices Surge

Following declines in recent months, prices paid by producers jumped by 2 percent in November, the sharpest monthly gain in more than 30 years, the Labor Department reported on Tuesday.

The gains, driven by a 6.1 percent rise in energy prices, including higher prices for capital equipment, finished goods, and other materials, the report said.

Excluding food and energy costs, so-called core prices rose 1.3 percent, the report said.

Personal Income Up

Personal income  grew 1.4 percent over the third quarter following slower gains earlier this year, the Commerce Department reported on Wednesday.

While income growth was spread out across the nation, the biggest gains were in the West and Mid-Atlantic regions, the report said.

Among all states, Washington ranked the highest for income growth over the quarter with an average gain of 2.6 percent, the report said. Other high-ranking states included New Mexico, Utah, and Wyoming.

Housing Starts Rebound

New residential construction  surged by 6.7 percent in November after falling by 14 percent the previous month, the Commerce Department reported Tuesday.

Despite the gains, housing permits for upcoming projects -- a closely-watched gauge of future activity in the sector -- fell 3 percent, the report said.

Housing starts and permits have each dropped by more than 25 percent in the past year, the report said.

Meanwhile, the mood of the nation's homebuilders remained low in December, though their outlook for the next six months improved, according to a report Monday by the National Association of Home Builders, a Washington-based trade group.

The group's monthly housing market index dropped a single point from November to 32 after falling to a year-long low of 30 in September, the report said.

Yet, looking ahead builders "sense that the tide is turning in term of buyer demand for their product and are feeling somewhat better about the prospects for home sales," David Seiders, the group's chief economist, said in a statement.

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