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US construction spending up 0.1 percent in May

By WTOP Staff

MARTIN CRUTSINGER
AP Economics Writer

WASHINGTON (AP) — U.S. construction spending barely increased in May as gains in spending on non-residential projects such as office buildings and public construction were largely offset by a big drop in home building.

Construction spending edged up 0.1 percent in May after a much stronger 0.8 percent April increase, the Commerce Department reported Tuesday. The back-to-back gain followed a period of weakness in which spending fell in both January and February and was flat in March.

The construction industry has struggled with an unusually severe winter which curtailed building activity in many regions.

Construction activity totaled $958.1 billion at a seasonally adjusted annual rate in May, up 6.6 percent from a year ago.

Economists are forecasting that housing and overall construction will regain momentum in coming months, helping to boost overall economic growth.

However, housing suffered a setback in April, falling 1.5 percent. Single-family home construction was down 1.4 percent while apartment construction dropped 0.6 percent. Overall, housing construction is up 7.5 percent from a year ago.

Non-residential construction rose 1.1 percent, led by a 4.3 percent rise in construction of power generating facilities. Construction of office buildings was up slightly but spending on hotels and the category that covers shopping centers both showed declines.

Spending on government projects rose 1 percent with a 2 percent jump in spending on state and local building projects offsetting an 8.9 percent decline in spending by the federal government on building projects.

A slump in construction in the winter contributed to the economy shrinking at an annual rate of 2.9 percent in the January-March quarter, the biggest decline since the first quarter of 2009 during the depths of the Great Recession.

The sharp downturn reflected not just bad weather but a decision by businesses to slow restocking of empty shelves and trim their capital spending on equipment. Additionally, the trade deficit widened in the first quarter, which also held economic activity back.

But analysts believe all of those developments were temporary and will be reversed in the current April-June quarter.

They had been expecting a rebound to growth as high as 4 percent in the second quarter, but disappointing results so far in consumer spending have caused them to trim back their forecasts, with many now looking for growth of around 3 percent, still a significant improvement from the sharp contraction in the first quarter.

Sales of both new and existing homes showed gains in May, providing evidence that housing is regaining lost momentum following a weak second half of last year when sales were hurt by a rise in mortgage rates and the lack of adequate supplies of new homes and then a harsh winter, which dampened demand further.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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