Will Construction Spending Boost First Quarter GDP?

ConstructionGovernment financial calamities dotted the first months of the year, and concerns that the fiscal cliff and the subsequent sequester would put the economy back in dire straits prompted many analysts and pundits to put forward a negative growth thesis. But so far, while the economic numbers have not been outstanding and gains have been uneven, slight improvements have been made in housing, labor, and manufacturing. Monday’s report on construction spending fits with that trend.

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Coming in just above the consensus estimate for a 1 percent gain, the United States Department of Commerce’s Census Bureau reported that construction outlays rebounded 1.2 percent in February to an annualized rate of $885.1 billion after falling 2.1 percent in January. Compared with the year-ago period, construction outlays were up 7.9 percent for February, above January’s 6.1 percent jump. With this improvement, the construction sector will likely add to first quarter economic growth…