[WASHINGTON] US construction spending rose more than expected in October as both private and public outlays increased, which could ease concerns of a sharp slowdown in fourth-quarter economic growth.
Construction spending rose 1.1 per cent, the largest gain since May, to an annual rate of US$970.99 billion, the Commerce Department said on Tuesday.
September's construction outlays were revised up to show only a 0.1 per cent drop instead of the previously reported 0.4 per cent fall. Economists polled by Reuters had forecast construction spending rising 0.6 per cent in October.
The upbeat construction data suggests some momentum in the economy early in the fourth quarter. Weak durable goods orders data has raised concerns of a sharp moderation in the pace of growth in the final three months of the year.
The economy grew at a 3.9 per cent annual pace in the third quarter.
In October, private construction spending increased 0.6 per cent, with outlays on residential projects recording their biggest rise since December of last year. Residential spending was boosted by increases in both single and multi-family homes as well as renovations.
Spending on public construction projects increased 2.3 per cent in October, buoyed by a 19.3 per cent surge in federal government outlays, the largest such increase since October of 2006.
State and local government investment increased 0.9 per cent after two straight months of declines.