U.S. construction spending rose 0.6% in September to $1.09 trillion, its highest level since March 2008, fueled by a surge in apartment building.
Construction of apartments and condominiums jumped 4.9% in September from August, while construction of single-family homes rose 1.3%, the Commerce Department reported Monday. Overall, private residential construction rose to the highest level since January 2008, reflecting gains in home building and renovations.
“Construction spending has increased every month this year, and the latest gain suggested the economy remained on firmer ground despite some slowing in consumer spending and persistent weakness in manufacturing,” Reuters said.
September’s increase is slightly above the gain that the government had estimated in its advance third-quarter gross domestic product estimate published last week. The government reported the economy grew at a 1.5% annual pace in the third quarter, hurt by business efforts to reduce an inventory glut and continued spending cuts by energy firms.
In the public sector, construction increased 0.7% from August. Spending on schools and other educational buildings rose 2.4%, and spending on water supply facilities was up 4.8%.
Federal construction spending fell 1%, the biggest decline since a 4.4% drop in June.
“On the surface, today’s data net out to be somewhat reassuring, if not perfect,” Diane Swonk, chief economist at Mesirow Financial, told the Associated Press. “Friday’s employment report will be the primary focus of the Federal Reserve, where the threshold for liftoff is low.”
The Fed last week held off from raising interest rates from record lows but indicated it will consider a move at its Dec. 15-16 meeting.