Residential and non-residential construction saw their biggest decline in seven months, while government spending saw their biggest drop in seventeen years.
The Commerce department declared an overall drop of 1.3% in June, following a 0.5% drop in May. This is the largest drop since another 1.3% drop back in November. Residential construction lost 0.5%, non-residential 0.3% and government spending dropped a massive 3.7%, which is the biggest drop since a 6% decline back in 2002. In the government spending category, state and local dropped the most, at a combined 4.1%, while national construction spending fell by 2.6%
In the overall picture of the economy, gross domestic product growth slowed to an annual 2.1%, down from 3.1% last year. Analysts think that the GDP growth will remain steady at 2%, unless the recent cut in interest rates from the Fed affect mortgage rates. Last week’s interest rate was the first cut in that rate in over a decade.
Residential has been hit hard, showing a loss in growth for the last six straight quarters.
Unemployment rates remain low, but there was a recent uptick in unemployment claims, up 8000 in the most recent week, to 215,000 in the count But even at that level, unemployment remains at historic lows. The jobless rate of 3.6% is at the lowest it’s been in nearly half a century.
To read more on this financial forecast, check out the Wall Street Journal.