Construction spending jumps in February
Construction spending posted its biggest increase in a year in February as builders took advantage of Americans' strong demand for new homes.
The Commerce Department reported Monday that spending on construction projects grew by a bigger-than-expected 1.1 percent in February.
Many analysts were forecasting a smaller, 0.6 percent rise.
It was the third straight monthly rise.
Virtually all of the strength came from increased spending on residential construction, which rose 3.5 percent, especially single-family homes.
Despite the recession that began in March 2001, home sales hit record highs last year. Buyers snapped up both new and existing homes, motivated not only by low mortgage rates but also by increases in home values, especially as the stock market swooned.
Even as mortgage rates have crept up over the last four weeks, home sales have remained at solid levels.
The 1.1 percent increase in construction spending in February matched the rise recorded in February 2001.
The report from the U.S. Department of Commerce is at http://www.census.gov/pub/const/c30_curr.pdf.