US construction spending fell a steeper-than-expected 0.6 percent in July as private home building reached a more than seven year low, a Commerce Department report showed on Tuesday. Spending on construction in July fell to a seasonally adjusted annual rate of $1.084 trillion, the lowest since February.
However, spending for June was revised to an increase of 0.3 percent from the 0.4 percent decline originally reported. Analysts polled by Reuters before the report were expecting a 0.4 percent decrease in construction spending in July from June's initial reading. Private home building was off 2.3 percent in July, the 16th consecutive decrease, bringing private residential construction to the lowest level since March 2001.
Public construction, including state and local as well as federal building, set record highs in signs of strength for the sector. US stocks were higher as falling oil prices boosted hopes for a recovery in consumer and business spending. However, US government debt prices and the dollar fell.
Compared to a year ago, private residential construction was off 27.5 percent which helped drag down overall private construction by 9.2 percent compared to July 2007. Total residential construction was down 27.1 percent compared to last year.