The headlines say construction was unchanged and within expectations. Our view is that this does not consider inflation, or the fact that the previous month's data was revised upward.

Analyst Opinion of Construction Spending

There continues to be significant backward revision to the date – this month was downward. The rolling averages declined. Also note that inflation is grabbing hold – and the inflation adjusted numbers are showing contraction in this sector.

The employment gains year-over-year are near the same than the year-over-year growth in construction spending.

Econintersect analysis:

US Census Analysis:

Construction spending (unadjusted data) was declining year-over-year for 48 straight months until November 2011. That was four years of headwinds for GDP.

This month's headline statement from US Census:

Construction spending during January 2018 was estimated at a seasonally adjusted annual rate of $1,262.8 billion, nearly the same as (±1.0 percent)* the revised December estimate of $1,262.7 billion. The January figure is 3.2 percent (±1.3 percent) above the January 2017 estimate of $1,223.5 billion.

PRIVATE CONSTRUCTION -Spending on private construction was at a seasonally adjusted annual rate of $962.7 billion, 0.5 percent (± 0.7 percent)* below the revised December estimate of $967.9 billion. Residential construction was at a seasonally adjusted annual rate of $523.2 billion in January, 0.3 percent (±1.3 percent)* above the revised December estimate of $521.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $439.6 billion in January, 1.5 percent (± 0.7 percent) below the revised December estimate of $446.2 billion.

PUBLIC CONSTRUCTION – In January, the estimated seasonally adjusted annual rate of public construction spending was $300.1 billion, 1.8 percent (±1.8 percent)* above the revised December estimate of $294.8 billion. Educational construction was at a seasonally adjusted annual rate of $76.7 billion, 2.1 percent (±3.8 percent)* above the revised December estimate of $75.2 billion. Highway construction was at a seasonally adjusted annual rate of $92.6 billion, 4.4 percent (±4.6 percent)* above the revised December estimate of $88.8 billion.