By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — A jump in home building helped lift U.S. construction spending in June, the Commerce Department said Wednesday.
Construction spending rose 0.4% to a seasonally adjusted annual rate of $842 billion. While the gain matched expectations, May’s levels were revised higher to a 1.6% advance from an initially reported 0.9% gain.
April also was revised higher, to a 0.9% gain from an initially reported 0.6% gain. Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said the revisions are enough to add about 0.2 percentage points to the initially reported 1.5% growth rate for the second quarter.
In June, residential construction climbed 1.3% while nonresidential construction was flat.
House building has picked up from low levels after the housing bubble burst. While new-home sales fell 8% in June on a monthly basis, they are 15.1% above June 2011 levels. Demand for apartments is particularly strong with rents climbing.
Compared to June 2011, construction spending is up 7% and residential spending in particular has surged 10.7%.
Other reports on the economy haven’t been as strong of late. A key manufacturing gauge in July pointed to contraction for the second month running, the Institute for Supply Management said. Read ISM story.
The U.S. created 163,000 private-sector jobs in July, ADP estimated. Read ADP story.
Steve Goldstein is MarketWatch's Washington bureau chief.
