US economic data shows slowdown in construction and job growth

Recent economic data from the United States indicates a broader slowdown in key sectors. Construction spending fell by 0.5% in July to $2.2 trillion, a 3.8% decrease compared to the previous year. This decline was driven largely by a 1.3% drop in residential construction, reflecting the impact of high interest rates on housing. While non-residential private construction saw a slight increase of 0.4%, overall public construction spending also dipped by 0.2%.

Simultaneously, the labor market showed signs of cooling. ADP reported that private sector payrolls increased by only 38,000 in August, falling short of the 47,000 analysts had projected. This represents the smallest increase since January. Job growth was heavily concentrated in education and health services, which added 45,000 positions, and leisure and hospitality, which added 16,000. Conversely, manufacturing lost 17,000 jobs, and professional and business services saw a decline of 16,000. Wage growth remained stagnant, with average hourly earnings increasing by 4.4%.

These combined trends in construction and employment suggest a transition toward more moderate economic activity, potentially influencing future monetary policy decisions by the Federal Reserve.