The Labor Department reported that the PPI for the month of February coming in at 0.3% slightly lower than the projected reading of 0.4% and lower than the prior reading of 1.0%. Also the annual reading of PPI came in at 0.05% higher than both the expected reading of 6.8% and the previous reading of 7.4%.
The Core PPI for the month of February came in at 0.5% higher than both the forecasted reading of 0.2% and slightly higher than the prior reading of 0.4%. As for the Core PPI annual reading came in at 2.4% higher than both the projected reading of 2.1% and the previous reading of 2.3%.

Energy prices rose 0.8% in February while food prices dropped 0.5% opposing the previous 1.7% jump. Producer prices for residential natural gas leaped in February as they rose 5.7% marking the biggest increase since October 2005.

Gasoline prices also climber 2.9% while prices for liquefied petroleum gas dropped 9.7% in February, the most since September 2006. Finally intermediate goods rose by 0.8%. Raw materials known as crude goods soared 3.7% this month as core crude goods moved along its side showing an incline of 3.3%.

After the release of the inflationary data on the consumer side last week, the data released today might not have much of an affect on the Fed's decision later today. The flat reading seen in the CPI gave the Feds the ability to go as far as one percentage point when it comes to the cut.

Despite the fact that the readings came in pretty much better than that of analyst expectations, we shouldn't neglect the fact that pressures to price stability remain to the upside as other sectors such as the automobiles and prescription drugs showed a rise.

In a different report released by the Commerce Department, Housing Starts for the month of February coming in at 1065 thousand better than the projected reading of 995 thousand and prior revised reading to 1071K from 1012 thousand.

Also the Building Permits for the month of February came in at 987 thousand worse than the expected reading of 1023 thousand and lower than the previous reading of 1048 thousand.

The bottom has yet to be hit in the housing sector as construction on single-family homes dropped by 6.7% in February to 707,000 marking the lowest level in 17 years. The overall housing starts dropped to 0.6% while the building permits fell 7.8%. This is the lowest since 1991 and is the biggest monthly decline in 13 years. Since building permits is a leading indicator of construction, this means that again the end has yet to come near!

The report validates that building remains weak and prices and sales are plunging. In the past year, housing starts fell 28.4% and building permits were down 36.5%. Single-family starts dropped 40.5% and their permits also fell 41.9% marking the largest drop in 26 years.

In the various regions, starts in the Northeast dropped 28%, remained flat in the Midwest and rose in the West and South by 5.1% and 3.9% respectively.

Not much movement was seen in the markets after the release of the data as market players are only eyeing the decision to be released later today. The effects have been locked in the markets that it is a definite cut, but the actual amount has been a betting game for many. So dear reader, enjoy the market while its calm for the next couple of hours as the spark might ignite a flame…