U.S. construction spending rose to the highest level in more than seven years in July, suggesting that the housing market and business investment can help underpin economic growth amid turbulence outside American borders.
Total construction spending climbed 0.7% from the prior month to a seasonally adjusted annual rate of $1.083 trillion, the Commerce Department said Tuesday, the highest level since May 2008.
Private building led the way, with both residential and nonresidential construction hitting new postrecession highs. State and local government spending dropped in July, but only after posting solid gains during the previous four months.
“The overall impression from the past few months is that the construction sector overall is the strongest part of the economy, with spending up at a remarkable 26% annualized rate in the three months to July,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients. More...