Increased Construction Spending Continues to Fuel Job Growth
Construction activity in the United States continued to gain steam in August, according to the U.S. Census Bureau. The seasonally adjusted value of construction put in place increased 0.6 percent on the month and 7.1 percent on the year to an annual rate of $915 billion, beating expectations for a more modest increase of 0.4 percent on the month. Data from July were upwardly revised from an increase of 0.6 percent to 1.4 percent.
Construction spending data generally have little direct impact on financial markets, but they do factor in to gross domestic product calculations. Although the total level of construction investment is still well below its pre-crisis levels, it is still a significant portion of GDP, and as construction activity increases, so does employment within the sector.
Both the belated employment situation report and the ADP payroll report for September showed increased employment in the construction center. Construction payrolls increased by as much as 5,000 for the month, suggesting that income construction spending data for September could continue the uptrend.