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US Construction Spending Outpaces Expectations

James Boston
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US Construction Spending Outpaces Expectations

As the US economy enters the final month of the year there is no sign of a let up in the gathering of economic pace in any of the nations key sectors. According to today’s data the short term retail sales figures are holding up well while the fourth quarter figures for the construction sector remain on track to finish the year on a high. The latest Construction Spending indicator just published by the US Census Bureau is showing an unexpected jump in the first month of the final quarter, the October reading has been announced as an increase of 1.1% in comparison to the expectation of just 0.6% spending growth, this easily makes up for the -0.1% fall experienced in September.

Likewise the Institute of Supply Management’s New York Business Conditions Index has performed strongly on previous readings, the latest update today is that this broad ranging confidence based indicator is reading at 62.4 for the month of November in comparison to 54.8 in October, expectations were for a print closer to the 60.0 level.

The retail sales picture is a bit more skewed due to the Thanksgiving holiday and traditional high volume sales days that follow in the form of Black Friday and Cyber Monday. Expected deep discounting on these days sap demand from the prior weeks as consumers keep their wallets in their pockets in anticipation of a bargain. The Redbook Numbers for the week ended 29th November are showing a fall, at -0.6% month on month this drop is less than the prior week’s recording of -0.8% and this slowing pace of the decline ahead of the holiday in fact bodes well for the retail sector in the US. On a less volatile year on year basis the Redbook growth continues to rise, today’s reading is showing 4.8% compared to the 4.2% experienced during the prior week.

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