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Construction spending remains weak

Residential construction spending slipped a bit in July, but since it only represents less than 2.5% of GDP, that's a drop in the bucket. Nonresidential spending also slipped, but I don't know anyone who expected it to strengthen; there's still plenty of idle capacity out there. Construction remains the weakest sector in the economy, but it no longer poses a serious threat to the overall GDP growth. The economy has been very busy in recent years shifting massive amounts of resources away from construction and into other sectors. This is a major rotation effort that will probably require a bit more time to be complete.

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