by Mish

If anything, today’s reports offer a strong hint that second quarter GDP was not as good as reported.

The commerce department reports Construction Spending in June fell 1.3% vs an Econoday consensus of a 0.5% gain. As a small consolation, the Commerce Department revised May spending from +0.0% to +0.3%.

Total Construction
Construction spending during June 2017 was estimated at a seasonally adjusted annual rate of $1,205.8 billion, 1.3 percent below the revised May estimate of $1,221.6 billion. During the first 6 months of this year, construction spending amounted to $577.0 billion, 4.8 percent above the $550.5 billion for the same period in 2016.
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $940.7 billion, 0.1 percent below the revised May estimate of $941.3 billion. Residential construction was at a seasonally adjusted annual rate of $502.9 billion in June, 0.2 percent below the revised May estimate of $504.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $437.8 billion in June, 0.1 percent above the revised May estimate of $437.3 billion.
Public Construction
In June, the estimated seasonally adjusted annual rate of public construction spending was $265.1 billion, 5.4 percent below the revised May estimate of $280.3 billion. Educational construction was at a seasonally adjusted annual rate of $67.5 billion, 5.5 percent below the revised May estimate of $71.4 billion. Highway construction was at a seasonally adjusted annual rate of $82.4 billion, 6.6 percent below the revised May estimate of $88.2 billion.

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Construction Spending Residential and Nonresidential

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Construction spending in the first half of the year shows improvement over 2016, but all of that took place in the first quarter.

Residential construction is far below the 2006 peak. Overbuilding of commercial construction kept employment strong.

Mike “Mish” Shedlock

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In the third and final estimate of first quarter GDP, the BEA upped its assessment of GDP from 1.2% to 1.4%. The Econoday consensus expected no change.

Personal Income Flat in June, May Revised Lower: PCE Inflation Down Again

Those expecting the relatively strong second-quarter consumer spending to continue in the third quarter may wish to reconsider.

Construction Spending Jumps (From Huge Revisions)

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Construction Spending Flat, Private Construction Negative

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In the wake of today’s economic reports, third-quarter GDP estimates from the Atlanta Fed GDPNow model and the New York Fed Nowcast model each plunged 0.8 percentage points.

First Quarter GDP Second Estimate 1.2 Percent: Mish vs. Consensus

This morning, the BEA revised its estimate of first-quarter GDP to 1.2% from 0.7%. The Econoday consensus estimate was 0.8%, in a range of 0.7% to 1.0%.

Construction Spending Unexpectedly Weak: Home Repairs Collapse

Economists expected a jump of 0.5% in construction spending. Instead, spending came in at 0.1%.

2nd Quarter GDP Final Estimate Tomorrow: Up or Down from Prior?

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