Construction spending declines for third straight month

The July figure is 10.7 percent below the July 2009 estimate of $901.2 billion, as existing home sales hit their lowest levels in 15 years in July and new homes sales dropped to their slowest pace in nearly 50 years. 

The government revised figures for May and June, showing weaker activity than previously reported. 

Wall Street was bolstered by the news combined with a positive manufacturing report from the Institute for Supply Management. 

Spending on private residential construction fell 2.6 percent to $240.3 billion from the revised June estimate of $246.7 billion, as the housing market slumped since the April 30 expiration of an up to $8,000 tax credit for homebuyers.

Spending on government construction dropped by 1.2 percent in July to $298.8 billion, 7.9 percent lower than the same time last year.