Construction Spending Rises to All Time High in US

U.S. construction spending increased more than expected in December as investment in private construction projects rose to a record high and federal government outlays rebounded strongly.

The Commerce Department said on Thursday construction spending rose 0.7 percent to an all-time high of $1.25 trillion. November’s construction outlays were revised down to show a 0.6 percent increase instead of the previously reported 0.8 percent advance.

Economists polled by Reuters had forecast construction spending increasing 0.4 percent in December. Construction spending advanced 2.6 percent on a year-on-year basis. It increased 3.8 percent in 2017, the smallest gain since 2011, after rising 6.5 percent in 2016.

In December, spending on private construction projects rose 0.8 percent to a record high of $963.2 billion after increasing 0.7 percent in November. Outlays on private residential projects gained 0.5 percent to the highest level since March 2007 after surging 1.1 percent in November.

Spending on nonresidential structures jumped 1.1 percent in December after climbing 0.3 percent in the prior month.

The government reported last week that spending on nonresidential structures such as oil and gas well drilling rebounded in the fourth quarter after slumping in the third quarter. The economy grew at a 2.6 percent annualized rate in the final three months of 2017, slowing from the third quarter’s brisk 3.2 percent rate.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza