Construction Spending Stronger than Expected
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U.S. construction in November was stronger than analysts had expected, according to data from the U.S. Commerce Department
and a Reuters poll of Wall Street analysts.
Public spending for the month increased 1.4%, with the Federal government leading the way with a 6% increase and the states lagging with a 1% gain in spending. Total public spending was at a record rate of $322 billion in November, CNNMoney
On the other hand, homebuilding continued to fall. Private homebuilding spending declined 4.2% in November, to its lowest annual rate since 1999, according to CNNMoney.
Other homebuilding data shows that sector continuing to weaken into the new year. The Pending Home Sales Index, considered a forward-looking indicator of home sales, fell again in November, to its lowest level since the index began in 2001, according to U.S. News and World Report.com
. Year over year the index is down 5.3% from November 2007.
Several commentators noted that the relative strength of construction spending versus expectations precedes what is anticipated to be a large Federal stimulus package when the new Administration takes over in Washington. This bodes well for the stimulus to be effective in boosting economic growth in 2009.