September US construction spending drops 1.9%, missing 0.3% estimate

• The prior month's gain was revised up to +2.0% from +0.9%.

A breakdown from the Census Department:

• Total construction spending posted a seasonally adjusted annual rate of $2,186.1 billion, a month-over-month decline of 1.9% from August's revised $2,227.4 billion.

• August's figure was revised upward to +2.0% from the previously reported +0.9%.

• Spending was 2.7% lower than a year earlier.

• For January through September, outlays were 2.9% below the same stretch of 2025.

September components, at seasonally adjusted annual rates, compared with August:

• Private construction: $1,639.3 billion versus August's $1,680.3 billion, a 2.4% monthly decline.

• Private residential: $848.8 billion versus $898.0 billion, down 5.5%.

• Private nonresidential: $790.6 billion versus $782.3 billion, up 1.1%.

• Public construction: $546.8 billion versus $547.1 billion, down 0.1%.

• Public education: $113.1 billion versus $113.1 billion, essentially unchanged.

• Public highways: $149.2 billion versus $149.7 billion, down 0.3%.

According to the Census Bureau's construction spending report, US construction spending fell 1.9% in September. The drop was centered in private residential construction, where outlays decreased 5.5%. The 1.1% gain in private nonresidential outlays was more than offset by that drop.

Public construction was effectively flat, meaning the private side accounted for nearly all of the total decline. The broader trend remains soft: spending was 2.7% below September 2025, and outlays through the first nine months of 2026 ran 2.9% under the comparable period a year earlier.

Quick read: Residential construction is the clear soft spot. That points to a weaker construction contribution to growth, although the private nonresidential gain provides some offset. On its own, softer spending could drag on Treasury yields and the dollar and bolster the case for easier Fed policy. Still, because the report is based on dollar spending, it does not distinguish between changes in construction activity and changes in prices.

What the report covers: Construction spending counts the dollar value of completed work on residential, commercial, and public projects. The monthly figures are seasonally adjusted and annualized, meaning they do not reflect the actual spend for that single month, and they are subject to revision. Traders watch the release for clues about housing, business investment, and economic growth.