Construction Slowdown Not So Bad

by: David Andrew Taylor

The value of construction spending for the month of September was almost unchanged from August with downward revisions to the previous two months. However, the slowdown should not be considered bad, overall. The new construction for residential homes saw the overall decline. Whereas, private residential construction saw an increase of 3%. The overall decline could be looked at as an anomaly, as the decline in spending may have been due to the hurricanes to hit the southeastern part of the States.

The dollar will not be focusing on this number, either. The focus for the currency market as of late has been the deficit and the trade balance. If anything, this number could be viewed as being negative for the dollar as currency traders have been focusing as much attention as they can on selling the dollar. Any news that is not stellar, could be another excuse to sell the dollar.

The bond market will not focus on this number as a concerning trend. The trend for new home construction has been increasing for some time. Unless there is a overall decline in future numbers, then the consumers spending in the residential markets are seen to continue. This has been one of the pillars that has brought the United States economy out of recession. To see a decrease in homes would be overall negative for the economy.