US construction spending fell 0.9 percent
WASHINGTON (AP) — U.S. construction spending fell in July from June by the largest amount in a year, weighed down by a big drop in home improvement projects.
But spending on construction of single-family homes and apartments increased again, a hopeful sign for the modest housing recovery.
The Commerce Department said Tuesday that overall construction spending declined 0.9 percent in July. It followed three months of gains, which were driven by increases in home and apartment construction.
The June decline left spending at a seasonally adjusted annual rate of $834.4 billion. That's nearly 12 percent above a 12-year low hit in February 2011. Construction activity is roughly half of what economists consider to be healthy.
"In short, a weaker than expected report," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics. Still, O'Sullivan noted that the data are extremely volatile and the trend in residential spending "is clearly still upward."
Spending on residential construction fell 1.6 percent in July from June to a seasonally adjusted annual level of $264.6 billion. But that was dragged lower by a 5.5 percent decline in home improvement projects.
Spending on single-family homes rose 1.5 percent, the fourth straight monthly gain. And spending on apartment construction was up 2.8 percent, the ninth straight gain.
Separately, CoreLogic, a private real estate data provide, said U.S. home prices jumped 3.8 percent in the 12 months ending in July. The year-over-year increase was the biggest in six years and the third national measure of home prices to show steady gains.
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