The 1.4% U.S. October construction spending rise
The 1.4% U.S. October construction spending rise after upward revisions beat estimates, thanks entirely to the public construction component, which exhibited a 3.9% October surge after prior hikes that implied a boost in Q3 GDP growth to 3.4% from 3.3% with a $3 B boost for government purchases. Nonresidential construction beat estimates while residential construction underperformed, alongside a restrained rise in home improvement activity -- though analysts have plenty of time for revisions in this volatile component as rebuild activity ripples through the construction surveys. For Q4 GDP analysts expect 2.6% growth, with an 8% (was 11%) Q4 growth rate for real residential construction after a 5.1% Q3 contraction rate, and a 6% (was 4%) Q4 growth rate for real nonresidential construction after a 6.8% contraction rate in Q3. Analysts expect a 1.5% Q4 growth rate for real government purchases after an estimated 0.8% (was 0.4%) pace in Q3. Note that despite the recent surge in public construction, analysts've seen just a 10.7% climb from the cyclical bottom in February of 2014. Public construction sits 2.9% bellow the 4-year high in June of 2015.