RTTNews - The amount of money spent on construction fell more than expected in May, halting a recent rebound. A drop in homebuilding contributed to the decline.
The U.S. Commerce Department revealed Wednesday that construction spending fell 0.9 percent in May, following a revised 0.6 percent rise in the previous month.
Economists had expected construction spending to fall by 0.6 percent following a rise of 0.8 percent that was originally reported for April.
Construction spending had been up in two consecutive months before May's decline.
Compared with the same period last year, May's construction spending was down 11.6 percent. For the first 5 months of the year, the figure is off 11.7 percent from 2008.
Government-sponsored construction dipped 0.6 percent in May. Educational building rose 0.5 percent, but highway construction dropped 1.3 percent.
Spending on private construction fell 1 percent in May compared to the previous month. This included a 3.4 percent slide in residential construction. Non-residential construction edged up 0.5 percent.
The residential construction figure could encourage further concern about the beleaguered housing sector, which continues to show general weakness despite some scattered signs of stabilization.
Wednesday also saw the release of a closely-watched measure of home sales that are waiting to be finalized.
Pending home sales edged up 0.1 percent in June, according to a report from the National Association of Realtors, slowing down dramatically from the 7.1 percent rise seen in the previous month. Still, this marked the fourth consecutive month of gains - the first time that has happened since 2004.
Earlier this week, an index of home prices in major cities showed a continued decline for April - with the S&P Case-Shiller index indicating that 20 major metropolitan areas had an overall home price drop of 18.1 percent.
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