Surge in Public U.S. Construction Masks Drop in Private Sector
Surge in Public U.S. Construction Masks Drop in Private Sector
(Bloomberg) -- U.S. construction spending is going in different
directions depending on whether it's spearheaded by governments
or the private sector, with a surge in public outlays masking a
slump in building by businesses.
Overall spending was little changed in April from the prior
month at an annual rate of $1.3 trillion, according to a report
Monday from the Commerce Department, below analyst forecasts for
a 0.4% increase. But the details showed private construction
plunged 1.7% from March, the worst drop in six years, while
government building jumped 4.8%, with the biggest boost in
federal outlays since 2017.
Public spending this year has jumped more than 10% in several
infrastructure categories including highways and streets, sewage
and waste disposal and water supply. In the private sector,
single-family home construction -- down 7.1% year-to-date -- is
a major factor in the slump, while commercial and communication
building have also seen notable declines.
While infrastructure investment may be long overdue in parts of
the country, the data could add to concerns that the economy is
slowing more broadly. Investors have been increasing bets in
recent weeks that the Federal Reserve will cut interest rates,
as a segment of the Treasury yield curve suggests a recession is
coming based on the pattern from prior expansions.
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