U.S. construction spending falls in June

Construction spending in the U.S. came in considerably below expectations in June, while the data for May was upwardly revised. Total construction spending dropped 1.1 percent sequentially, as compared with a consensus expectations of 0.3 percent rise. The latest fall was mainly due to public spending on construction, both in residential and nonresidential categories. Public-sector construction dropped 3.5 percent sequentially, while private construction fell at a more modest pace of 0.4 percent.

In the meantime, the data for May was upwardly revised from 0.4 percent to 1.3 percent rise. The Census Bureau stated that the upward revisions to the April and May historical data were in large part due to the stronger residential rebound. On a year-on-year basis, construction spending rose 6.1 percent keeping the growth trend about where it was in the second quarter of last year.

In the private residential sector, most of the fall was due to multi-family units, while single-family and home improvements recorded only modest changes. Spending on single-family units dropped 0.4 percent and spending on improvements rose modestly by 0.1 percent on the month. With several surveys indicating strong demand for homes, construction spending in the private residential sector is expected to stay on a solid footing as reflected by the 8 percent year-on-year growth rate, stated Barclays in a research report. Meanwhile construction spending fell in both the residential and non-residential sectors.

At 20:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 44.51. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex