Nonresidential activity increases: The Commerce Department reported today that construction spending dropped by 0.6% in November, less than half of the 1.3% decline economists expected. A 4.2% fall in housing construction was partially offset by a surprisingly strong 0.7% rise in nonresidential activity. The 0.6% decline in total construction followed a 0.4% drop in October. The October performance was revised upward from an original estimate that construction had dropped 1.2% that month. Economists expect housing, which has been in a slump for two years, to continue to struggle in the months ahead. They also are concerned that nonresidential projects will falter as developers deal with a severe financial crisis making it hard to get financing amid a yearlong recession that has curbed the appetite for new shopping centers and office buildings.
Gas prices climb 1.4 cents overnight: Israel’s ground offensive in Gaza and a dispute between Ukraine and Russia over gas imports pushed oil prices above $47 a barrel this morning, but some analysts say there’s more than just unrest in the Middle East behind the rally. Light, sweet crude for February delivery rose 92 cents to $47.26 a barrel on the New York Mercantile Exchange, after jumping $1.74 on Friday to settle at $46.34. Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said there seems to be a mood change in the market and a belief that the economic doom and gloom has hit bottom. The national retail average price for a gallon of regular gas rose 1.4 cents to $1.672 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. That is about 8 cents a gallon below what it was a month ago and about $2.43 below where it was in July when prices peaked at $4.11 per gallon.