USA: housing misery ‘deepens’

Housing starts in the U.S. hit a 16-year low in January, a sign the deepest housing recession in a quarter century will weigh on the economy well into 2008...

Housing starts rose 0.4 percent to an annual rate of 1.01 million, according to the median estimate in a Bloomberg News survey of economists before the Commerce Department's Feb. 20 report. Consumer prices rose 0.3 percent in January, a slower rate than the prior month, Labor Department figures the same day may show.

Near-record inventories of unsold homes, mounting foreclosures and falling prices signal the housing slump will weigh on growth for a third year. That's likely to keep the Federal Reserve cutting interest rates as recession risks outweigh concerns that inflation will accelerate.

``The housing market continues to fall deeper into recession,'' said Michelle Meyer, economist at Lehman Brothers Holdings Inc. in New York. ``As growth slows and slack develops in the economy, inflation should cool.''