Construction spending was sharply higher than expected for September but a large downward revision to August was essentially offsetting. Overall construction spending advanced 0.8 percent in September after slipping a downwardly revised 0.1 percent in August. The increase in September was well above the consensus forecast for a 0.2 percent dip. However, the decrease in August is now significantly lower than the original estimate of a 0.8 percent gain. The boost in spending in September was led by a 3.8 percent surge in private residential outlays. Private nonresidential declined 1.8 percent and public outlays decreased 0.1 percent in the latest month.
On a year-ago basis, overall construction outlays slipped to minus 13.0 percent in September from minus 12.5 percent the previous month.
Overall, housing continues a moderate recovery. However, now that housing is on an uptrend, the nonresidential and public sectors are still in recession and it may be some time before they turn up.
Inclusive of revisions, September outlays were close to expectations. But there were other reports out at the same time that clearly were positive. Pending home sales spiked and ISM manufacturing rose further. Equities advanced on these other reports while Treasury yields firmed.
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