US Construction Spending Accelerates as Housing Starts Rise

After a 0.4% increase in April, U.S. construction spending rose 0.9% in May, more than the 0.6% gain originally forecast by economists polled by Reuters. Spending on private construction projects rose 1.1%, while investment in residential construction rebounded 2.2% after a 0.9% drop the previous month. Spending in the market for single-family homes accelerated 1.7% in May amid an increase in housing starts, Reuters reports.

The Commerce Department said on Monday that construction spending rose 0.9% after gaining 0.4% in April.

Though the housing market has taken the biggest hit from the Federal Reserve's fastest monetary policy tightening cycle since the 1980s, an acute shortage of single-family homes available for sale is driving construction. Housing starts soared in May.

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