U.S. Construction Spending Rose in November

01/03/2002 |

WASHINGTON (Reuters) - U.S. construction spending rose 0.8 percent in an unseasonably mild November, the government said on Thursday, in another positive sign for the slumping economy.

The value of construction rose to $865.1 billion, up from a revised $858.6 billion in October. Construction spending was up 4.6 percent from a year earlier, when it was valued at $826.7 billion.

The report exceeded the forecasts of analysts polled by Reuters, who had expected a rise of 0.6 percent.

Mild fall weather in much of the country allowed the building season to continue well past normal, analysts said.

``These are positive numbers because the weather has been so warm,'' said Diane Swonk, chief economist for Banc One in Chicago.

The return to normal weather patterns in the northern part of the country, coupled with an unusually heavy snowstorm in the South is likely to depress construction spending data in January, Swonk said.

Public construction rose 4.6 percent in November, the Commerce Department reported, while all private construction dropped 0.5 percent.

Private residential construction fell 2.2 percent in November, while private nonresidential spending climbed 0.5 percent.

Recent economic data suggested the economy may be on the verge of recovery. Most recently, a gauge of factory activity, which has slumped in the recession, rose sharply on Wednesday.

However, an increase in jobless claims reported by the government Thursday took some of the gloss off recent optimism about an anticipated rebound. Analysts braced for an unemployment report on Friday that was expected to show more job losses.


Related Coverage