Construction spending declines
U.S. spending on residential and nonresidential construction decreased 0.3% in May from the prior month and dropped 3.5% from a year earlier, as developers remained cautious amid elevated materials and financing costs. The Commerce Department said total construction spending reached about $2.1 trillion in May, based on seasonally adjusted annual figures.
“Construction spending dropped for the ninth consecutive month, indicating that private residential outlays and business spending on structures will slump in the second quarter,” Bernard Yaros, lead U.S. economist at Oxford Economics, said in a Tuesday statement. The forecasting firm said second-quarter residential investment was on track to fall 8.1% from a year earlier, with business investment in nonresidential structures expected to slump 6.2%.
The government said May’s residential construction spending dropped 0.5% from the prior month and declined 6.5% from a year earlier, with annual drops of 4.5% for single-family and 10.9% for multifamily projects.
Senate passes sprawling tax and spending package
The Senate narrowly approved changes to the "One Big Beautiful Bill" tax and spending package on Tuesday, by a 51-50 vote. The House is slated to take up the measure soon to see if it will be sent to President Donald Trump for his signature.
The legislation has implications for real estate interests. The Senate stripped the bill of language to make federal lands available for housing development, after objections from Sen. Mike Lee, a Republican representing Utah.
"Because of the strict constraints of the budget reconciliation process, I was unable to secure clear, enforceable safeguards to guarantee that these lands would be sold only to American families — not to China, not to BlackRock, and not to any foreign interests," Lee said in a statement.
The Senate did agree to higher caps for the state and local tax deduction, or SALT, ahead of an expiration date set for the end of this year. The new provision allows for a SALT deduction of $40,000, up from $10,000, for households earning $500,000.
Job openings hit six-month high
U.S. job openings reached their highest level since November, with 7.8 million positions available at the end of May, up from 7.4 million in April, according to the latest Labor Department data.
Government figures released Tuesday showed 5.5 million hirings for the month, with separations at 5.2 million. Forecasting firm Oxford Economics said the relatively stable trends will likely help keep the Federal Reserve in a wait-and-see mode as it decides on potential interest rate reductions, after it left rates unchanged last month. The next Fed rate-setting meeting is slated for July 29-30.