Construction spending dipped in August ahead of Fed rate cut

By Aarthi Swaminathan

Construction spending fell 0.1% in August, the Commerce Department reported Tuesday

Construction spending fell in August as companies scaled back projects across the U.S. ahead of the Federal Reserve's decision to cut its benchmark interest rate.

Spending on construction projects fell 0.1% in August to $2.13 trillion, the Commerce Department reported Tuesday. Spending was down for the second month in a row.

The figure fell short of expectations. Economists surveyed by Dow Jones Newswires and the Wall Street Journal expected construction spending to be flat in August.

Construction spending reveals how much the government and private companies spend on projects such as housing and highways. The more the U.S. spends on construction, the higher the level of economic activity.

The government revised spending on construction in July to a sharper drop of 0.5%, compared with an initial reading of a drop of 0.3%.

Over the past year, construction spending is up 4.1%.

In terms of residential real estate, private residential construction spending fell 0.3% in August, with spending on single-family construction falling 1.5% and spending on multifamily construction falling 0.4%.

Spending on public residential construction rose by 1.6% in August and was up 4.6% year over year.

-Aarthi Swaminathan

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-01-24 1016ET

Copyright (c) 2024 Dow Jones & Company, Inc.