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American construction spending suddenly dives in December
In December, American construction spending suddenly declined because investment in both public and private projects decreased. It proves that the US economy lost momentum at the end of the previous year.
As the Commerce Department informed, construction spending slumped by 0.6% after an unrevised 0.8% ascend in November.
Market experts had foreseen construction spending would soar by up to 0.2% in December. The report extended the run of downbeat economic December data, which has come with housing starts, retail sales, home sales, and trade.
On a year-on-year basis, construction spending went up by 1.6% in December. It went up by 4.1% the previous year, which appears to be the weakest outcome since 2011. The publication of the December report was postponed by a five-week partial shutdown of the American government, which concluded on January 25.
December's dismal construction spending data could affect the government's fourth-quarter GDP estimate uncovered last Friday.
The government informed that the American economy shot up at a 2.6% annualized rate for the October-December period, speeding down from the third quarter's 3.4% tempo.
Spending on private construction projects went down by 0.6% in December having gone up by 1.3% in November. Moreover, investment in private residential projects went down by 1.4% having bounced off 3.4% in November. Apparently, the housing market has been suppressed by higher mortgage rates, costly building materials, land and also labor shortages. As for residential investment, it shrank by 0.2% last year.
Spending on private nonresidential structures, including power plants and manufacturing, tacked on by 0.4% in December having dived by 1.1% in November. As for spending on nonresidential structures, it went down in the third and fourth quarters.
Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
The United States will publish the Federal Open Market Committee Meeting Minutes on November 24, at 21:00 GMT+2.
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.