Construction spending ticks up, led by housing
The numbers: Construction spending rose 0.8% to a seasonally adjusted annual rate of $1.3 trillion in November from a revised $1.29 trillion in October, helped by housing, the Commerce Department said Friday.
What happened: Economists surveyed by Econoday had forecast a 0.2% increase, but October figures were revised down. Outlays in November were 3.4% higher than a year ago, and for the first 11 months of 2018, were 4.5% higher than the same period in the prior year.
Big picture: Residential construction spending was up 3.4% during the month, and was 0.6% higher for the year. That’s good news for the supply-starved housing sector. In November, overall private-sector spending was 1.3% higher for the month, edging out a 0.9% decline in public-sector spending.
Market reaction: Companies tied to residential construction, like D.R. Horton, Inc. DHI, -1.20% , and Toll Brothers, Inc. TOL, +0.08% , have rebounded smartly since the start of the year. But industrials are lagging: Caterpillar Inc. CAT, -1.69% has gained about 5% for the year to date, below the 8% increase for the S&P 500 SPX, +0.09% .