Construction spending fell 0.4 pct in July

WASHINGTON (Reuters) - U.S. construction spending took a surprising fall of 0.4 percent in July, its largest drop since January 2007, as gains in commercial building failed to offset declines in home building, a government report showed on Tuesday.

Analysts polled by Reuters were expecting construction spending to remain unchanged in July. The seasonally adjusted annual rate of construction fell to $1.17 trillion while private residential construction took its 17th straight drop to reach an annual rate of $534 billion, the lowest since February 2004. Private construction declined 0.7 percent to an annual rate of $880 billion, the lowest level since May 2005.

Private nonresidential construction rose 0.4 percent to a $346 billion annual rate, a record high. Public construction was also higher, rising 0.7 percent to $289 billion and its highest level on record.