WASHINGTON — Construction spending unexpectedly surged 0.7% in October, aided by a strong gain in residential construction, the Commerce Department reported Wednesday.
Economists expected a 0.4% decline in construction spending. September construction spending was revised upward to a 0.7% increase from the 0.5% rise initially reported last month.
Private construction increased 0.8% as residential construction jumped 2.5%.
Patrick Newport, an economist at IHS Global Insight, said much of the October gain in construction spending was due to residential improvements. Without them, he said it would have dropped 0.2% as single-family construction fell for the sixth straight month.
“Private nonresidential construction had another awful month as four of 11 major categories — office, commercial, manufacturing and lodging — fell to their lowest level since the economy fell into recession in December 2007,” he said.
