The U.S. Census Bureau of the Department of Commerce announced on Dec. 1 that construction spending during October 2008 was estimated at a seasonally adjusted annual rate of $1,072.6 billion, 1.2% below the revised September estimate of $1,085.7 billion. The October figure is 4.6% below the October 2007 estimate of $1,124.2 billion.
During the first 10 months of this year, construction spending amounted to $906.3 billion, 5.7% below the $960.9 billion for the same period in 2007.
In October, the estimated seasonally adjusted annual rate of public construction spending was $316.1 billion, 0.7% above the revised September estimate of $313.8 billion. Educational construction was at a seasonally adjusted annual rate of $88.0 billion, 1.2% above the revised September estimate of $86.9 billion. Highway construction was at a seasonally adjusted annual rate of $81.8 billion, 0.9% below the revised September estimate of $82.5 billion.
Spending on private construction was at a seasonally adjusted annual rate of $756.5 billion, 2.0% below the revised September estimate of $771.9 billion. Residential construction was at a seasonally adjusted annual rate of $338.8 billion in October, 3.5% below the revised September estimate of $351.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $417.7 billion in October, 0.7% below the revised September estimate of $420.6 billion.
In other economic news, the U.S. economy officially entered a recession in December 2007, and the downturn already is longer than the average for recessions since World War II, according to the National Bureau of Economic Research (NBER), the committee of economists charged with charting the beginning and ending dates of U.S. recessions.
The NBER’s Business Cycle Dating Commmittee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.
The NBER defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”
The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.
For example, payroll employment, one of the economic indicators used by the NBER and defined as the number of filled jobs in the economy based on the Bureau of Labor Statistics’ large survey of employers, reached a peak in December 2007 and has declined in every month since then.
