U.S. Construction Spending Rose By 0.4% M/M In June

Total U.S. construction spending rose by 0.4% m/m in June, which was stronger than the 0.3% expected by consensus, but in line with our 0.4% forecast. It comes after May was revised up sharply to a 1.6% pace (was up 0.9% before). Total construction spending is up 7.0% from last June. June private construction was up 0.7% over May, after a 2.1% rise over April, and up 13.1% over June 2011. In contrast, total public spending was flat in June, after a 0.5% May gain (revised from -0.4%). It was down 3.7% from June 2011. Total residential construction spending rose by 1.3% m/m after a 3.0% surge in May, and is up 10.7% over last June. A 1.3% m/m jump (12.1% y/y gain) in private residential construction spending was noted in the report alongside a 0.8% m/m gain (27.5% y/y drop) in public residential construction spending for June. Nonresidential construction was flat, though follows a revised 0.9% gain in May (was flat). The upbeat data will likely be overlooked by the disappointing ISM manufacturing report today and the upcoming FOMC announcement.

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