Construction spending on strongest pace since March 2009

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Posted: Friday, January 3, 2014 12:00 am

WASHINGTON — U.S. construction spending rose in November at the strongest pace in more than four years, driven by solid gains in home construction and commercial projects.

The Commerce Department said construction spending increased 1 percent in November to a seasonally adjusted annual rate of $934.4 billion. That’s the fastest rate since March 2009 and a slight improvement on the revised 0.9 percent gain in October.

Residential construction rose 1.9 percent in November, after falling in October. Homebuilding last exceeded the November pace shortly before the 2008 financial crisis. Spending on single-family homes has increased 18.4 percent year over year, while spending on apartment buildings is up 36.3 percent during the same period.

Those gains are a positive sign for the overall economy. More than two-thirds of the residential construction market comes from single-family homes.

Each new home creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders. — AP

WASHINGTON — U.S. manufacturing grew at a healthy pace in December as factories stepped up hiring and received more orders. The expansion suggests solid growth at the end of the year.

The Institute for Supply Management, a trade group of purchasing managers, said Thursday that its index of manufacturing activity slipped to 57 from 57.3 in November. But that’s still the second-highest reading in the past 2½ years. And any reading above 50 signals growth.

A measure of new orders rose to the highest level since April 2010. And a gauge of hiring increased to its highest level since June 2011. Production and a measure of manufacturers’ stockpiles fell.

“It is clear that growth remained strong at the end of last year and this should continue into 2014,” said Paul Dales, an economist at Capital Economics.

Overseas demand is growing, but at a much slower rate, the survey found. A gauge of export orders fell to 55 from 59.5.

The small decline in the U.S. survey doesn’t dampen the outlook for American factories. The manufacturing index had increased for six straight months through November. — AP

WASHINGTON — The number of Americans seeking unemployment benefits dipped 2,000 last week to a seasonally adjusted 339,000, evidence that layoffs are low and hiring will likely remain steady.

The Labor Department said Thursday that the less volatile four-week average rose 8,500 to 357,250. The average was driven up in recent weeks by spikes that reflected seasonal volatility around the Thanksgiving and Christmas holidays.. — AP

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