WASHINGTON -- U.S. construction spending rose 0.6 percent in September to the highest level since March 2008, pushed up by a surge in apartment building.
The Commerce Department said Monday that spending on construction rose to a seasonally adjusted annual rate of $1.09 trillion. Construction of apartments and condominiums jumped 4.9 percent in September from August, while construction of single-family homes rose 1.3 percent. Overall, private residential construction rose to the highest level since January 2008.
The housing market has proven relatively resilient this year despite economic weakness overseas that has hurt American manufacturers and limited hiring. The department reported last week that private investment in housing grew at an annual pace of 6.1 percent from July through September -- four times the 1.5 percent growth registered by the overall economy.
Spending on nonresidential construction slipped 0.1 percent in September, the department said. But spending on construction of churches and other religious buildings rose 5.6 percent.
Public construction grew 0.7 percent from August. Spending on schools and other educational buildings rose 2.4 percent, and spending on water supply facilities was up 4.8 percent.
Federal construction spending fell 1 percent, the biggest decline since a 4.4 percent drop in June.
"On the surface, today's data net out to be somewhat reassuring, if not perfect," said Diane Swonk, chief economist at Mesirow Financial. "Friday's employment report will be the primary focus of the Federal Reserve, where the threshold for liftoff is low."
The Fed last week held off from raising interest rates from record lows but signaled that it will be considering a move at its Dec. 15-16 meeting. For the Fed to delay an increase again, the upcoming jobs report would have to be a "disaster," Swonk said.
Sales of previously owned homes rose 4.7 percent in September to a seasonally adjusted annual rate of 5.55 million. That was a sign that the U.S. housing sector has been insulated from weaker growth overseas, which is slowing growth in the U.S. manufacturing and energy sectors.
The housing market's health is mixed. New home sales fell in September to their lowest level since November 2014 and remain far below their long-run average.
The construction of new homes rose at a healthy pace in September and is up 12 percent so far this year compared with 2014. But the bulk of the growth has been fueled by condominiums and apartment buildings. Single-family home construction was flat in September.
The homeownership rate in the U.S. rose for the first time in two years in the third quarter.
Business on 11/03/2015