US Construction Spending Unexpectedly Tumbles For 4th Straight Month

Homebuilder stocks have soared to record highs as the US housing market appears to barely blink at the biggest economic contraction since The Great Depression.

While stocks initially collapsed, the data never did and now homebuilders are back at record highs…

Source: Bloomberg

There’s just one thing though…

US Construction Spending surprised to the downside in June, falling 0.7% MoM versus expectation of a 1.0% rise.

Source: Bloomberg

Under the hood, it was a mixed bag with private residential falling and non-residential managing a small gain:

• Private residential construction fell 1.5%

• Private nonresidential construction rose 0.2%

With Educational and Recreation construction collapsing most…

Single-family home construction spending remains drastically down YoY…

Additionally, Public construction fell 0.7% in June (with government construction spending was 26.1% of total in June).

However, perhaps most notably, private residential home improvement spending fell 0.4% in June to $201.5b, not confirming the narrative of a not-dining-out American consumer ‘nesting’ at home that has propelled so many home-related stocks.