US construction spending rises 0.6 percent in September to highest level in 7 ½ years
WASHINGTON (AP) — U.S. construction spending rose 0.6 percent in September to the highest level since March 2008, pushed up by a surge in apartment building.
The Commerce Department said Monday that spending on construction rose to a seasonally adjusted annual rate of $1.09 trillion. Construction of apartments and condominiums jumped 4.9 percent in September from August, while construction of single-family homes rose 1.3 percent. Overall, private residential construction rose to the highest level since January 2008.
The housing market has proven relatively resilient this year amid economic weakness overseas that has hurt American manufacturers and limited hiring. Commerce reported last week that private investment in housing grew at an annual pace of 6.1 percent from July through September — four times the 1.5 percent growth registered by the overall economy.
Spending on nonresidential construction slipped 0.1 percent in September, Commerce said. But spending on construction of churches and other religious buildings rose 5.6 percent.
Public construction grew 0.7 percent from August. Spending on schools and other educational buildings rose 2.4 percent, and spending on water supply facilities was up 4.8 percent.
Federal construction spending fell 1 percent, the biggest decline since a 4.4 percent drop in June.
“On the surface, today’s data net out to be somewhat reassuring, if not perfect,” said Diane Swonk, chief economist at Mesirow Financial. “Friday’s employment report will be the primary focus of the Federal Reserve, where the threshold for liftoff is low.”
The Fed last week held off from raising interest rates from record lows but signaled that they will be considering a move at its Dec. 15-16 meeting. For the Fed to delay a hike again, the upcoming jobs report would have to be a “disaster,” Swonk said.
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