Construction Spending Gives Reason for Cheer

Construction spending was up 1.1 percent in October the largest increase since May. That gives some analysts reason to think maybe the disappointing retail sales season-- the one that’s only a few days old?-- won’t hurt the economy as much as predicted. 

So why all the construction activity? 

Since May interest rates have steadily continued to decline more than a quarter of a percent-- which as I have talked about before can be very good for the real estate business. 

Unlike existing home sales, new construction is a lynchpin of economic activity creating jobs and purchases at the local and national level. For example the sale of new light duty trucks can be a reflection of robust construction activity as tradesman buy trucks to sustain their business. 

Construction spending for September was revised upward from a loss of .4 percent to a loss of .1 percent.