U.S. home construction fell to its lowest point in nearly 10 years during January in an unexpectedly large decrease that erased hopeful gains posted in two prior months.

A separate report showed wholesale prices fell last month, after two strong months of gains, suggesting that underlying inflationary pressures remain broadly contained.

Housing starts plunged by 14.3% to a seasonally adjusted 1.408 million annual rate, the U.S. Commerce Department said today.

The government raised its original estimate for December starts. Construction rose by 5% to 1.643 million, revised from an originally reported 4.5% climb to 1.642 million.

Economists had called for a 2.6% decline in Januray starts to a 1.600 million annual rate. The last time construction was lower was August 1997, when starts were at 1.390 million.

Building permits also resumed falling. January building permits fell by 2.8% to an annual rate of 1.568 million. Economists expected permits would fall by 1.4% to 1.590 million.

Permits increased a revised 6.6% in December to 1.613 million, compared with an earlier estimated 5.5% climb to 1.596 million.

Meanwhile, U.S. producer prices also retreated last month, but came in on target with expectations.

The producer price index for finished goods fell 0.6% in January, the U.S. Labor Department said today after rising 0.9% in December and 1.8% in November.

The core PPI, which excludes volatile food and energy prices, increased 0.2%, matching December’s rise. In the 12 months ending in January, overall wholesale prices rose 0.2%. The core PPI was up 1.8% compared to a year ago.