Total construction spending rose 1.7% in January to a seasonally adjusted annual rate of $877.9 billion, according to the Commerce Department. This January was the largest increase in a year, while the increase in private construction was the largest in almost two years. The construction-spending rise was led by a 2.5% jump in residential construction to a record level of $452.6 billion.

Overall private construction spending increased 1.9% to $667.9 billion in January. Private nonresidential construction, which includes office buildings, hospitals, and factories, fell .3% on the month. Public construction of roads, sewer systems, hospitals, and schools rose 1% in January after a .6% increase in December.