US Construction Spending Rises 1.4%, Best Gainer in 5 Months
U.S. construction spending surged 1.4% in October, the best gain in 5 months, with all major categories of building posting gains.
The October spending increase was the 3rd monthly gainer after more modest advances of 0.3% in September and 0.5% in August, the Commerce Department said Friday.
Home building was up 0.4%, with strength in single-family construction offsetting a drop in apartment building. Nonresidential construction rose 0.9% after 4 straight decliners. Spending on government projects jumped 3.9%, the biggest 1-month gain in 3 years, with spending at the federal and state and local levels all showing increases.
Though home building has been weak for much of the year, economists expect such construction to rebound as a strong job market boosts sales in coming months.
The overall economy grew at a healthy annual rate of 3.3% in the July-September Quarter, the best showing in 3 years, even though residential construction declined for a 2nd straight Quarter. But economists remain optimistic that the low level of unemployment at 4.1% in October will spark a sustained rebound in sales and construction.
The strength in October was evident in all major sectors of construction. The rise in housing construction reflected a 0.3% gain in single-family homes, which offset a 1.6% drop in the smaller apartment category.
In the non-residential area, office building was up a strong 4.4%, and hotel construction rose 2.3%. Those gains offset a 1.9% fall in the category that covers shopping centers.
In government categories, spending at the state and local level rose 3.3%, while spending on federal projects jumped 11.1%.
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