Construction spending dropped 1.1% in February, according to the Commerce Department. The numbers were a disappointment to most analysts
In all probability, builders continue to watch a drop in home prices which was most recently seen in the S&P/Case-Shiller Index. Foreclosures are also running at a brisk pace according to new data from Corelogic and RealtyTrac.
Record low interest rates have not drawn buyers into the market, because, they too believe the home prices have further to fall. No one wants to have negative equity in a home just a year after a purchase.
The number is also an indication that unemployment in the construction industry, among the highest of any sector, is not likely to improve, which will put a drag on the jobs recovery.