Economy Watch: Construction Spending Rises in March

By Dees Stribling, Contributing Editor

The Census Bureau reported on Thursday that construction spending during March was at an annualized rate of $942.5 billion, or 0.2 percent above the revised February rate. The March 2014 figure is 8.4 percent above the March 2013’s annualized rate of $869.2 billion.

Private construction spending was up; public spending was down. Spending on private construction projects in March came in at annualized rate of $679.6 billion, or 0.5 percent above the February rate. As for public construction spending, it was at an annualized rate $262.9 billion, or 0.6 percent below the February rate.

Among property types, new single-family home construction gained 0.2 percent for the month, while multifamily was up 4.4 percent. For the year, they were up 13.2 percent and 32.5 percent, respectively. Similarly, spending on office construction was up 13.5 percent year-over-year and other commercial projects (industrial, retail) gained 13.5 percent since last year.

Job creation spikes in April

The Bureau of Labor Statistics reported on Friday that the U.S. economy created 288,000 jobs in April, a strong showing for the month. Employment gains for the month were widespread, including hiring in professional and business services, retail trade, food services and drinking places, and construction, though there was relatively little job growth in information services or the public sector. Job growth has averaged 190,000 per month over the previous 12 months.

The unemployment rate, which is based on a separate survey by the bureau, dropped to 6.3 percent for April, compared with 6.7 percent in March. The BLS measurement of unemployment known as U-6, which includes the unemployed who are actively looking for work, but also discouraged workers and part-time workers looking for full-time work but who can’t find it, came in at 12.3 percent in April, compared with 12.7 percent in March. A year ago the U-6 was 13.9 percent.

Separately, the U.S. Department of Labor reported on Thursday that for the week ending April 26, initial unemployment claims was 344,000, an increase of 14,000 from the previous week’s revised level. The less jumpy four-week moving average was 320,000, an increase of 3,000 from the previous week’s revised average.

Manufacturing sector stronger

Manufacturing activity is up, according to the Institute for Supply Management on Thursday. The organization’s April PMI came in at 54.9 percent, an increase of 1.2 percentage points from March’s reading of 53.7 percent, which reflects expansion in manufacturing for the 11th consecutive month.

The organization’s New Orders Index registered 55.1 percent, the same as in March, while its Production Index was 55.7 percent, slightly below the March reading of 55.9 percent. Still, manufacturing employment grew for the 10th consecutive month, with the Employment Index coming in at 54.7 percent, an increase of 3.6 percentage points over March.

Wall Street had a mixed day on Thursday, ahead of the jobs numbers, with the Dow Jones Industrial Average losing 21.97 points, or 0.13 percent. The S&P 500 was off a mere 0.01 percent but the Nasdaq gained 0.31 percent.