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US construction spending jumps to eight-year high
[WASHINGTON] US construction spending surged in January to the highest level since 2007, in the latest indication that the economy was regaining momentum after slowing in the fourth quarter.
Construction spending increased 1.5 per cent to $1.14 trillion, the highest level since Oct 2007, as both private and public outlays rose, the Commerce Department said on Tuesday. That followed an upwardly revised 0.6 per cent increase in December, previously reported as a 0.1 per cent gain.
Economists polled by Reuters had forecast construction spending rising 0.4 per cent in January. Construction outlays were up 10.4 per cent from a year ago.
The report adds to upbeat data on consumer spending, the labor market, industrial production and durable goods orders in suggesting that economic growth picked up at the start of the first quarter after slowing to a 1.0 per cent annual rate in the final three months of 2015.
First-quarter gross domestic product growth estimates are currently as high as a 2.7 per cent pace, but the strong construction spending report could prompt economists to raise their forecasts.
In January, construction spending was buoyed by a 0.5 per cent rise in private residential construction projects to the highest level since Nov 2007.
Outlays on private nonresidential structures, which include factories and offices, rose 1.0 per cent. Spending on private residential construction was unchanged in January.
Public construction outlays jumped 4.5 per cent to their highest level since Sept 2010. Spending on state and local government construction projects, the largest portion of the public sector segment, shot up 4.4 per cent. Federal government construction spending advanced 5.8 per cent.