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U.S. construction spending slows, factory growth readings mixed

Reuters  |  WASHINGTON 

(Reuters) - U.S. construction spending fell for a third straight month, government data showed on Monday, while private-sector figures showed an uptick in order growth but offered a mixed view on overall factory activity.

The data comes as many investors are watching for signs the Federal Reserve's three-year tightening cycle could be coming to a close after an expected hike this month, which would be the fourth by this year.

The Commerce Department said total construction spending fell 0.1 percent to $1.31 trillion in October, while economists polled by had forecast outlays rising 0.4 percent.

The figure rose 4.9 percent on a year-over-year basis.

The Commerce Department also revised its September construction figure, previously reported as unchanged, to show a 0.1 percent decline.

Private construction spending fell by 0.4 percent in October, compared to 0.4 percent growth a month earlier. Private residential outlays dipped 0.5 percent to the lowest since November 2017.

U.S. activity picked up in November, according to data from the (ISM), though a gauge of prices paid tumbled from a month earlier.

ISM's U.S. index rose to 59.3 in November from 57.7 in October, topping economists' expectations for a reading of 57.6. A reading above 50 indicates expansion in the sector.

A subindex of prices paid fell to 60.7 from 71.6 in October, coming in well below estimates for a reading of 70. Gauges of new orders and employment rose.

Separate figures on Monday from financial data firm Markit showed the pace of growth in the factory sector slipped to a three-month low, though a gauge of new orders ticked higher.

Markit's U.S. manufacturing PMI fell to 55.3 from 55.7 in October, the lowest since August and down slightly from Markit's preliminary reading for November.

Financial markets were little moved by the data as investors focused on signs of progress in trade negotiations between the and

Minutes from the Federal Reserve's November meeting released on Thursday showed nearly all Fed officials had agreed another rate hike was warranted soon but also opened debate on whether to pause further increases.

Policymakers flagged issues including signs of slowing in interest-rate sensitive sectors, along with global risks and other factors.

Data on Thursday showed U.S. consumer spending had risen by the most in seven months in October, but that underlying price pressures slowed.

Testimony from Fed to about the economic outlook scheduled for Wednesday has been postponed due to a of mourning following the death of former No new date for the testimony has been announced.

Powell last week had said the central bank's policy rate was now "just below" estimates of a level that neither brakes nor boosts a healthy U.S.

(Reporting by Meredith Mazzilli, Editing by Andrea Ricci)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 23:12 IST
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