March construction spending surges, business purchases rise
March construction spending rose more than expected and business purchasing hit its highest level since summer 2004, according to data released moments ago.
March construction spending rose 0.2 percent, surprising forecasters who expected a 0.2 percent decline. That in itself would have been good news, because in February, construction spending contracted at a rate of 1.3 percent. A rise in construction spending means increased activity for associated businesses, including the Home Depots of the economy.
Also, the Institute for Supply Management index -- which tracks business purchasing in the U.S. and is seen as one gauge of economic activity -- rose from 59.6 in February to 60.4 in March, hitting its highest mark in six years. This means businesses are beginning to buy all the goods that manufacturers cranked out in the fourth quarter of 2009, raising the GDP.
The markets are responding favorably to this news and to the consumer spending data from this morning.
In the first 40 minutes of trading, the Dow is up seven-tenths of 1 percent.
The broader S&P 500 and tech-heavy Nasdaq are up six-tenths of 1 percent.
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May 3, 2010; 10:25 AM ET
Categories: Data , The Ticker | Tags: Business, Construction, Construction and Maintenance, Consulting, Contract, Economic, Institute for Supply Management, Twitter, United States, construction spending
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