December U.S. Construction Spending Surged 1.5% M/M

U.S. total construction spending surged 1.5% over November, which was over twice the 0.7% expected by consensus and pushes spending to the highest level in almost two years. However, it comes after the 1.2% jump reported the prior month was downwardly revised to a 0.4% gain. Gains were seen across all groups, with gains in nonresidential construction leading the pack. Total nonresidential construction spending was up 1.9% m/m and is up 4.5% over last year, while total residential construction rose 0.7% m/m and is up just 3.8% y/y. Private nonresidential construction was up 3.3% m/m and is up 11.4% over last year. Private residential construction was up 0.8% m/m and is up a more modest 4.9% over last year. Total public construction rose 0.5% m/m in December and is down 2.5% over last year. While the stronger than expected headline reading is somewhat masked by the downward revision the prior month, it still will help provide a boost to the 4Q GDP component and to overall 4Q GDP in the 2nd release. 

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