There has been an increase in the consumer prices in July while the home construction witnessed a decline in the same period. These surely indicate towards a weakening economy. The consumer price index increased by 0.25 in the month of June while there was an increase of 0.4% in the month of July. There has been an increase of 2.8%in the core prices, the core prices exclude energy and food, and this is the most increase since November 2001.



Another important indicator that is the housing starts fell to a two year low. The Federal Reserve policy makers kept the interest rates unchanged after 2 years of increase feel that the slowdown in growth will ultimately limit the price pressure. With the inflation levels rising there is a possibility of a speculation as o whether the Federal Reserve will increase the interest rates. The core consumer prices increases for the fifth consecutive month by 0.3%.such a kind of increase was last witnessed during the period October 1992 to February 1993.