A marginal headline gain of 0.1 percent in construction spending masks
significant declines in residential spending during August. Residential
spending fell 0.7 percent in the month to more than offset a 0.2 percent
rise in July. Looking at sub-components, single-family spending was
also down 0.7 percent in August with multi-unit spending down 1.7
percent. Home improvement spending fell 0.6 percent.
Strength in
the report is in highways & streets, up 1.7 percent in the month.
Educational spending was also strong with a 1.0 percent gain. Government
spending was very active in August, up 5.9 percent at the Federal level
and up 1.7 percent for state & local.
Private nonresidential
spending was flat, down 0.2 percent overall with commercial, power and
manufacturing subcomponents all showing declines to offset gains for
transportation and offices.
This report is not pointing to
acceleration in business investment and is consistent with another weak
quarter for residential investment which remains the economy's weak spot
for 2018.
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