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U.S. Construction Spending Jumps 1.4% In October, Much More Than Expected

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Construction spending in the U.S. jumped by much more than anticipated in the month of October, the Commerce Department revealed in a report on Friday.

The report said construction spending surged up by 1.4 percent to an annual rate of $1.242 trillion in October after rising by 0.3 percent to a revised $1.225 trillion in September. Economists had expected spending to climb by 0.5 percent.

The bigger than expected increase in construction spending was primarily due to a spike in spending on public construction, which shot up by 3.9 percent to $291.6 billion in October from $280.7 billion in September.

Spending on educational construction soared by 10.9 percent to $79.0 billion, while spending on highway construction climbed by 1.1 percent to $86.8 billion.

Michael Pearce, U.S. economist at Capital Economics, said the jump in spending on public construction suggests government spending will go from being a modest drag on economic growth to providing a small boost in the fourth quarter.

The report said spending on private construction rose by a more modest 0.6 percent to $949.9 billion in October from $943.8 billion in September.

While spending on residential construction increased by 0.4 percent to $517.7 billion, spending on non-residential construction climbed by 0.9 percent to $432.2 billion.

The Commerce Department noted total construction spending in October was up by 2.9 percent compared to the same month a year ago.

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