U.S. construction spending (search) grew by 0.5 percent in September, a Commerce Department report showed on Tuesday, matching expectations and reaching a record high as private residential spending jumped.

Construction spending mounted in September to a seasonally adjusted annual rate of $1.120 trillion from a revised $1.115 trillion in August. This amount was initially reported as $1.109 trillion.

Despite frequent predictions that it will cool, the rampant U.S. housing market (search) has shown little sign of slacking off in a prolonged rally that has sent home prices soaring in some parts of the country.

Private nonresidential construction, often used as an indicator of business confidence, shrank by 0.3 percent to $247.2 billion.

In the public sphere, total public construction was unchanged in September at $248.5 billion, with public residential outlays declining 3.3 percent while public spending on nonresidential building edged ahead by just 0.1 percent.

The Commerce Department did not provide a separate estimate of the impact of hurricanes Katrina and Rita, which hammered the U.S. Gulf Coast (search) in late August and early September. But the hardest-hit states — Louisiana, Mississippi and Alabama — accounted for slightly more than 3 percent of total construction spending in 2004.