The U.S. construction spending report was modestly disappointing
The U.S. construction spending report was modestly disappointing, with a lean 0.1% July rise after annual revisions extending back to 2008 that left a weaker Q3 entry for residential and nonresidential construction than analysts had assumed. The construction spending figures continue to defy the lift for most housing measures in 2019, and hence the construction components of GDP are under-performing as well. Analysts now expect a boost in Q2 GDP growth to 2.1% from 2.0%, with revisions of $6 B for public construction, -$1 B for residential investment, and -$2 B for nonresidential investment. Analysts expect Q3 GDP growth of 2.5%, with a 1.7% Q3 growth rate in "real" residential construction after an estimated -3.6% (was -2.9%) Q2 pace. Analysts expect a -6.4% Q3 growth figure for "real" nonresidential construction after an estimated -10.8% (was -9.4%) Q2 pace. Analysts expect growth for government purchases of 3.2% in Q3 after an estimated 5.2% (was 4.5%) clip in Q2.