RTTNews - With a drop in spending on public construction more than offsetting a modest increase in spending on private construction, the Commerce Department released a report on Tuesday showing that construction spending decreased in the month of July.
The report showed that construction spending fell 0.2 percent in July following a downwardly revised 0.1 percent increase in June. Economists had expected spending to fall 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.
With the modest monthly decrease, construction spending is down 10.5 percent compared to the same month last year. For the first seven month of the year, spending is down 11.4 percent compared to the same period a year ago.
The monthly decrease in spending was largely due to a 0.7 percent drop in spending on public construction, which reflected a 1.3 percent drop in spending on educational construction and a 1.0 percent decrease in spending on highway construction.
At the same time, the Commerce Department said that spending on private construction edged up 0.1 percent in July. A 2.3 percent increase in spending on residential construction more than offset a 1.2 percent decrease in spending on non-residential construction.
In other economic news, the Institute for Supply Management released a report showing an expansion in manufacturing activity in the month of August following eighteen consecutive months of contraction.
The ISM said its manufacturing index jumped to 52.9 in August from 48.9 in July, with a reading above 50 indicating an expansion in the sector. With the increase, the index rose to its highest level since June of 2007.
On average, economists had been expecting a more modest increase by the index to a reading of 50.2, which would have still indicated modest growth in the sector.
Separately, the National Association of Realtors said its pending home sales index rose 3.2 percent to 97.6 in July from a reading of 94.6 in June. Economists had been expecting a more modest increase of about 1.5 percent.
The increase by the index marked the sixth consecutive month of growth and lifted the index to its highest level since June of 2007.
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