Economy Watch: Construction Spending Rises in October
The Census Bureau reported that U.S. construction spending during October came in at an annualized rate of $971 billion, 1.1 percent higher than in September.
By Dees Stribling, Contributing Editor
The Census Bureau reported on Tuesday that U.S. construction spending during October came in at an annualized rate of $971 billion, 1.1 percent higher than in September. Both private and public spending increased for the month, with private spending edging up 0.6 percent and public construction spending up a healthier 2.3 percent.
Residential construction came in at an annualized rate of $353.8 billion in October, 1.3 percent higher than in September. Nonresidential construction was up 1 percent for the month, but much of that represented public projects, since private nonresidential construction contracted a bit, down 0.1 percent month-over-month in October.
Some property types saw upticks for the month. Construction spending on office projects, for instance, was up 2 percent in October compared with September; lodging projects saw a 3.3 percent increase for the month; and manufacturing facilities saw a 3.4 percent increase. Other categories were down for the month, such as construction on religious properties, off 3.7 percent, and power facilities, off 1 percent.
CoreLogic reports deceleration of home price increases
On Tuesday, CoreLogic reported more statistical evidence that home price increases are slowing down, noting that prices nationwide, including distressed sales (REOs and short sales), increased 6.1 percent in October compared with a year earlier. This change represents 32 months of consecutive year-over-year increases in home prices nationally, but the rate of increase is also lower than it’s been most of this year. Excluding distressed sales, home prices nationally increased 5.6 percent in October compared with a year earlier.
Also excluding distressed sales, 49 states and the District of Columbia showed year-over-year home price appreciation in October, with Mississippi being the only state to suffer an annual decline (down 1.2 percent). On a month-over-month basis, home prices nationwide, including distressed sales, rose by 0.5 percent in October 2014. Exclude distressed sales and the rise was 0.6 percent.
“Home price growth is moderating as we head into the late fall and is currently running at half the pace it was in the spring of 2014,” Sam Khater, deputy chief economist at CoreLogic, notes. “However, there are still pockets of strength, especially in several Texas markets, as well as Seattle, Denver and other markets with strong economic growth.”
Wall Street bounced back on Tuesday, with the Dow Jones Industrial Average gaining 102.75 points, or 0.58 percent. The S&P 500 and the Nasdaq were up 0.64 percent and 0.6 percent, respectively.