In November, construction spending surprised on the upside falling 0.6% M/M, while the consensus was seeking for a drop of 1.4% M/M. The previous figure was upwardly revised from -1.2% M/M to -0.4% M/M. The decline was due to a 1.5% M/M drop in private construction spending as private residential construction plunged 4.2% M/M to $328 billion, the lowest annual level since August 1999. Public construction spending rose 1.4% M/M in November, and was already strong in previous months, offsetting still weak private spending. . The overall outcome is encouraging, as the declines have been more moderate in recent months, even positive for August/September. As a consequence, on a yearly basis, the decline slowed to 3.3% from 6-to-7% in the summer months.
December vehicle sales showed some unexpected improvement in December, coming out at an annual 7.8 million unit rate, up from 7.8 million units in November. On a yearly basis, the decline was nevertheless still impressive at 32% and 39% for respectively cars and trucks. GM said its “Red tag Event” was well received, while also the 0% financing offer helped sales. While the outcome is encouraging, we wouldn’t be too enthusiast and wait for the next few months before concluding the worst is over. The December figures, while better than expected, were still very weak.
