INSTANT VIEW: Key points and comments about CPI data

NEW YORK (Reuters) - Consumer prices rose 0.3 percent in March, slightly less than expected as cheaper clothing helped hold down overall prices despite a modest rebound in energy prices, a Labor Department report on Wednesday showed.

U.S. home building projects started in March fell by 11.9 percent to a lower-than-expected annual rate while building permit activity, a sign of future construction plans, was off 5.8 percent, a government report on Wednesday said.

KEY POINTS:

CPI: * The rise in March prices was less than the 0.4 percent gain that Wall Street economists had forecast. * Prices were flat in February. So-called core consumer prices that exclude food and energy were up 0.2 percent - in line with expectations - after also being unchanged in February. * Energy prices gained 1.9 percent in March after declining 0.5 percent in February. * Costlier energy has been a major factor in rising concern about potential inflation, but it did not show through strongly in the March data.

HOUSING: * The Commerce Department said housing starts set an annual pace of 947,000 units in March, lower than the 1.02 million expected by economists. * The February starts figure was revised upwards to 1.075 million from the 1.065 million originally reported. * Building permits fell by 5.8 percent to an annual rate of 927,000, the slowest pace since a 916,000 rate set in April 1991. * Economists polled by Reuters had forecast March permits at 970,000 after the 984,000 rate of February.

COMMENTS:

MIKE POND, TREASURY AND INFLATION-LINKED STRATEGIST, BARCLAYS

CAPITAL IN NEW YORK:

"There really hasn't been a huge (bond market) reaction here. We didn't get any big surprises. Short TIPS break evens are up between 1 and 3 basis points since the release.

"Nominal Treasuries have had a little bit of a turnaround from a sell-off to a bit of a rally here because this is a relatively subdued report on the core side. It doesn't create any concern from the Fed's perspective at the core inflation level.

"The Fed don't appear concerned about the core at this point because they expect slower growth to eventually bring inflation down.

"We don't think that's the case. We think inflation pressures in the United States are coming from strong global demand for food and energy."

STEPHEN MALYON, SENIOR CURRENCY STRATEGIST, SCOTIA CAPITAL,

TORONTO:

CPI:

"The CPI was bang on expectations, I suppose the market is likely to focus on the housing starts number. The traders might actually be a little bit relieved that CPI came in as expected following yesterday's upside surprise in the producer price index.