(Bloomberg) -- Spending on U.S. construction projects climbed more than forecast in December, showing the housing industry is sustaining gains that may lift the economy.
Outlays rose 0.9 percent to a $885 billion annual rate, the highest level since August 2009, after increasing a revised 0.1 percent in November, the Commerce Department reported today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for a 0.7 percent increase.
Improving demand driven by population growth and affordable borrowing costs, coupled with low inventories, is fueling business for homebuilders such as D.R. Horton Inc. (DHI) Limited access to credit and little progress on reducing unemployment may prevent bigger gains in the real estate recovery.
“When we see volumes pick up, that makes homebuilders feel more comfortable about going out and creating new houses because they feel like the market’s starting to pick up,” Andres Garcia Amaya, a U.S. market strategist at JPMorgan Investment Management in New York, said before the report. “There’s just not enough houses out there for people to buy.”
In another report today, payrolls rose by 157,000 workers last month following a surge at the end of 2012 that was larger than previously estimated, according to the Labor Department. The unemployment rate climbed to 7.9 percent from 7.8 percent in December, according to a separate survey of households.
Estimates in the Bloomberg survey for construction spending ranged from little changed to gains of 1.7 percent. November was initially reported as a 0.3 percent drop.
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