U.S. Homebuilding Shows Biggest Decline in Five Years in November

Washington, D.C.–U.S. construction spending rose unexpectedly in November, but private homebuilding spending saw its biggest drop since 2002, according to Commerce Department data released Wednesday.Construction spending was up 0.1 percent; in October, it fell by an adjusted 0.4 percent, Bloomberg reports. School, power plant and factory construction offset continued weakness in homebuilding.Private residential building spending declined 2.5 percent–the 21st consecutive drop in home construction–following a 2.3 percent decline in October. Non-residential building was up 2.1 percent.While the increase in commercial spending showed signs economic growth may be stronger than many had feared, the drop in residential building indicated the housing slump may drag on until at least mid-2008, Bloomberg said.The Institute for Supply Management issued a separate report today that said manufacturing showed its biggest decrease in five years in December, supporting speculation that the Federal Reserve will cut interest rates again in 2008.