These improvements attracted a huge industry for the construction of residential and commercial investment.

Growth in capital spending was also sizable, but residential investment slipped as higher interest rates cut into housing starts, today's report showed.

Non residential investment: Expenditures by firms on capital such as tools, machinery, and factories.

Meanwhile, spending on residential fixed investment - basically home building - fell at an annual rate of 15.9 percent.

The latest quarter was also the first time since 1991 that residential fixed investment declined in three consecutive quarters.

Home building and other residential investment fell even more quickly than the government said earlier - at an annual pace of 9.8 percent.

Meanwhile, the housing bubble has turned to bust, dragging residential investment down.

There was little development until 1890 when extensive investments in land, both residential and commercial, took place.

In fact, during the first year of the Reagan recovery residential investment rose 46 percent.

This time, residential investment kept rising through the recession, thanks to the Fed's interest rate cuts.