WASHINGTON (Reuters) – US construction spending unexpectedly fell in December as investment in single-family home construction continued to fall amid higher mortgage rates.
The Commerce Department said on Wednesday that construction spending fell 0.4% in December. Economists polled by Reuters had forecast construction spending unchanged.
Construction spending rose 7.7% year-on-year in November. It jumped 10.2% in 2022.
Spending on private construction projects decreased by 0.4%. Investment in residential construction fell 0.3%, and spending on single-family housing projects fell 2.3%. Outlays on multi-family housing projects increased 3.2%, driven by strong demand for rental housing.
The Fed’s fastest interest rate hike cycle since the 1980s has pushed housing into recession. Residential investment suffered its seventh consecutive quarterly decline in the fourth quarter, the longest streak since the collapse of the housing bubble triggered the Great Recession of 2007-2009.
Outlays on private non-residential structures such as oil and gas well drilling fell 0.5% in December.
Spending on public works fell 0.4%. Investment in state and local government construction projects fell 0.1%, while federal government construction spending fell 4.1%.
(Reporting by Lucía Mutikani)
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