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Weak U.S. inflation, housing data point to sluggish growth

Weak U.S. inflation, housing data point to sluggish growth

Posted by Liliana Castaño on March 18, 2014

U.S. inflation was muted in February and housing starts fell for a third straight month, giving the Federal Reserve plenty of room to keep interest rates low even as it scales back the amount of money it is pumping into the economy.

The data, which came as the Fed opened a two-day policy meeting, painted a picture of sluggish economic growth in the first quarter as unseasonably cold weather disrupted activity. A jump in building permits last month, however, also offered cautious optimism for an acceleration once the weather warms up.

"The economy is not too hot and not too cold. Winter was a difficult season for housing and there are no signs that inflation is about to pick up in a meaningful way," said Thomas Costerg, an economist at Standard Chartered Bank in New York.

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