The Commerce Department reported Tuesday that construction spending dropped 0.4 percent in July, compared with June, the weakest showing since a 0.6 percent fall in January.The worst is yet to come in the housing market as more families are forced into foreclosure and the glut of homes on the market grows. The more that grows the less construction activity will be needed. This will cause layoffs in the construction industry and and other industries connected to the housing market. I still think the worst is yet to come and that the housing market will not see significant improvement until the affordability index comes back to reasonable levels.
It was a bigger drop than economists had been expecting and underscored the continued drag the severe slump in housing is having on building activity.
The lower and middle classes are hurting as a result of the housing bubble and the pain will continue to be felt until after the Presidential election.