Highlights
Manufacturing was positive today but construction was not. But the housing component showed strength. Construction spending declined 0.6 percent in August, following a 0.4 percent drop in July (originally down 0.9 percent). The consensus called for a 0.6 percent gain.

The drop August was led by a 1.7 percent decrease in private nonresidential outlays after a 0.5 percent dip the month before. Also, public outlays fell 0.8 percent, following a 0.5 percent decrease in July.

On the positive side, private residential spending rebounded a notable 0.9 percent, following a 0.1 percent slip in July.

On a year-ago basis, overall construction gained 6.5 percent in August, compared to 10.3 percent the month before.

Basically, housing is still on an uptrend while other components have weakened. Nonresidential outlays may have softened due to uncertainty over the economy, notably fiscal policy. And public outlays clearly have weakened due to revenue shortfalls at the state and local government levels. Housing is being supported by extremely low mortgage rates.

Market Consensus before announcement
Construction spending fell back 0.9 percent in July, following a 0.4 percent gain in June and 1.7 percent boost in May. The drop in July was led by private residential outlays which declined 1.6 percent after a 2.4 percent boost in June. But private residential was led down by spending on existing structures which plunged 5.5 percent, following gains of 1.4 percent in June and 4.6 percent in May. New one-family structures actually rose 1.5 percent, following a 3.1 percent boost the prior month. New multifamily structures advanced 2.8 percent after a 3.5 percent increase in June. So, the recent uptrend in housing starts was not misleading. Turning to other sectors, private nonresidential outlays declined 0.9 percent in July, following a 0.9 percent drop in June. Public outlays decreased 0.4 percent after no change in June.

2012 Release Schedule

Released On: 1/3 2/1 3/1 4/2 5/1 6/1 7/2 8/1 9/4 10/1 11/1 12/3 Release For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct