US construction spending surged in January to the highest level since 2007, in the latest indication that the economy was regaining momentum after slowing in the fourth quarter.
Construction spending increased 1.5% to $1.14 trillion, the highest level since October 2007, as both private and public outlays rose, the Commerce Department said on Tuesday, Reuters reported.
That followed an upwardly revised 0.6% increase in December, previously reported as a 0.1% gain. Economists polled by Reuters had forecast construction spending rising 0.4% in January. Construction outlays were up 10.4% from a year ago.
The report adds to upbeat data on consumer spending, the labor market, industrial production and durable goods orders in suggesting that economic growth picked up at the start of the first quarter after slowing to a 1.0% annual rate in the final three months of 2015.
First-quarter gross domestic product growth estimates are currently as high as a 2.7% pace, but the strong construction spending report could prompt economists to raise their forecasts.
