U.S. construction spending unexpectedly tumbled in July as outlays for housing plunged, the U.S. government said Tuesday.

Total spending decreased by 0.4% at a seasonally adjusted annual rate of US$1.169 trillion, the U.S. Commerce Department said. Spending rose 0.1% in June.

Wall Street economists had expected July construction spending would be flat. The 0.4% fall was the largest decline since a drop of 0.6% in January 2007.

Residential construction spending decreased in July, down by 1.4% to US$541.9 billion. Residential spending decreased 0.4% in June; it was originally seen down 0.7% for the month. Year-to-year, residential was 15.6% lower in July.

Nonresidential construction spending rose by 0.6% in July.

Private-sector construction spending during July fell 0.7% to US$880.1 billion. Spending went 0.2% lower in June.

Public, or government, construction spending increased 0.7% to US$289.0 billion. June outlays rose 1%. Federal government construction outlays dropped by 0.4%, but state and local spending increased 0.8% to US$269.6 billion.