THE ECONOMY

New Home Construction Slows for 3rd Month: Housing starts slowed in July as high mortgage rates cut into sales, which in turn could check growth elsewhere in the economy. The Commerce Department report fueled speculation that Federal Reserve Board policymakers will not be compelled to raise short-term interest rates next week. Housing starts slipped 1.3% in July to a seasonally adjusted 1.46-million annual rate, the smallest since 1.44 million in March. Builders had laid foundations at a 1.48-million rate in June. For the first seven months of 1996, housing starts were 12.4% above those of the same period a year ago. Starts for all of 1995 totaled 1.35 million. But sales of new and existing homes both fell in June.