Key facts
- U.S. construction spending fell 0.1% in June.
- Economists had forecast a 0.2% increase in construction spending.
- Residential construction fell 3.3% year-over-year.
- Higher mortgage rates are impacting residential construction.
U.S. construction spending experienced an unexpected decline in June, falling by 0.1%. This downturn defied economists' expectations, who had projected a 0.2% increase for the month. The primary driver behind this contraction was the residential construction sector, which saw a substantial decrease of 3.3% when compared to the same period last year. The persistent rise in mortgage rates continues to exert downward pressure on residential building activity, impacting overall construction figures. The unexpected dip in construction spending signals a potential cooling in the sector, which had been anticipated to grow.