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Housing starts surge; Wholesale prices edge up/WHY WE NEED PRISON REFORM

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WASHINGTON – Housing construction posted a surprisingly large increase in February, bolstered by strength in all parts of the country except the West. The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent in February compared with January, pushing total activity to a seasonally adjusted annual rate of 583,000 units. Meanwhile, the Labor Department reported that wholesale prices edged up a slight 0.1 percent in February as a big drop in food costs offset a second monthly increase in energy prices. After the news, Wall Street posted gains, with the Dow Jones industrial average gaining slightly and the Nasdaq composite index rising more than 1 percent. The better-than-expected reports on housing and inflation were offset by news of a dividend cut at Alcoa Inc. and layoffs at Nokia Corp. While the surge in housing construction was far better than the continued decline economists had expected, the rebound is likely to be viewed as a temporary gain given all the problems the housing industry still faces.