The U.S. construction spending report undershot estimates
The U.S. construction spending report undershot estimates with a -0.8% October drop that was spread across components. Yet, the damage was capped by upward revisions that lifted Q3 levels for nonresidential and public construction, before a big October drop for nonresidential construction and a smaller public drop that left a firm level. Analysts saw big upward revisions in the July and August home improvement residual before a drop-back in September and October, while the important new residential construction figures tracked assumptions through October, with solid single-family data but weak multi-family figures. The residential construction figures have lagged this year's big upturn in the data for housing starts, permits, and new and existing home sales, though the climb for new home construction since July is starting to close the gap despite oddly weak home improvement data. Analysts now expect a Q3 GDP growth boost to 2.2% from 2.1%, with a $3 B hike for nonresidential construction and a $2 B boost for public construction, though with a -$1 B trimming for residential construction.