Economy Watch: Construction Spending Edges Down in August
The Census Bureau reported that U.S. construction spending during August came in at an annualized rate of $961 billion, 0.8 percent below the July rate.
By Dees Stribling, Contributing Editor
The Census Bureau reported on Wednesday that U.S. construction spending during August came in at an annualized rate of $961 billion, 0.8 percent below the July rate. Still, the August 2014 figure is 5 percent above the August 2013 annualized rate of $915.3 billion. Both private and public spending dropped this August.
Spending on private construction fell 0.8 percent in August compared with July. Residential construction dropped 0.1 percent month-over-month, while nonresidential construction dropped more: 1.4 percent below July. Government spending on construction projects was down as well, declining 0.9 percent for the month.
Since this time last year, office construction spending is up 18.9 percent, and hotel construction gained 10.2 percent, but the big winner was multifamily construction, up 35.9 percent. Also, construction of manufacturing-related facilities gained up 14.5 percent year-over-year. On the other hand, spending on communications infrastructure dropped 10.5 percent since last year, and a little surprisingly, healthcare construction spending was off 6.6 percent.
ADP reports job gain of 213K for August
Private sector employment increased by 213,000 jobs from August to September, according to the latest August ADP National Employment Report. The report, which is derived from ADP’s payroll data, sometimes jibes with the official employment report, which is due on Friday, but not always.
The gains, according to the company, weren’t quite evenly distributed among large, medium, and small employers (more than 500 workers, 50-500 and fewer than 50, respectively). Large businesses added 77,000 positions, while medium businesses added 48,000 and small ones added 88,000. Manufacturing added 35,000 jobs, while construction added 20,000.
“Job gains remain strong and steady,” Mark Zandi, chief economist of Moody’s Analytics, says. “The pace of job growth has been remarkably similar for the past several years. Especially encouraging most recently is the increasingly broad base nature of those gains. Nearly all industries and companies of all sizes are adding consistently to payrolls.”
Wall Street took a dive on Wednesday—Ebola jitters? (airline stocks were down)—with the Dow Jones Industrial Average off 238.19 points, or 1.4 percent. The S&P 500 declined 1.32 percent and the Nasdaq lost 1.59 percent.