Builders in America broke ground on the fewest homes in 17 months and a measure of producer prices rose less than expected, pointing to slower growth and contained inflation.

Housing starts declined 7.4% to an annual rate of 1.849 million in April, the Commerce Department said yesterday in Washington. Wholesale prices excluding food and energy rose 0.1% for a second month, the Labor Department said.

The figures may give comfort to the chairman of the Federal Reserve, Ben Bernanke, who says a decision on whether to continue raising interest rates will depend on what the Fed learns about the economy between now and its June 28-29 meeting. Another report yesterday, showing a jump in industrial production, suggests the economy will keep expanding even as housing cools.

“This data is fine if the Fed wants to pause,” a senior economic adviser at HVB America and a former Fed economist, Roger Kubarych, said. “Core-level inflationary pressures are clearly contained, the slowdown in the housing market is stable and moderate, and companies are investing in capital goods that will increase productivity.”