WASHINGTON, Sept. 1 (UPI) -- Construction spending in the United States dropped 1 percent in July compared to June, the U.S. Commerce Department said Wednesday.

Economists had expected a drop of 0.5 percent in private and public construction outlays. But spending totaled $805.2 billion for the month, compared to the revised figure for June of $813.1 billion, the report said.

Expenditures on private construction on a seasonally adjusted annual basis fell 0.8 percent from the previous month to $510.7 billion.

Residential construction outlays fell 2.6 percent to $240.3 billion while non-residential project spending rose 0.8 percent to $266.2 billion.

Spending decreased 1.2 percent on projects involving public funds. Construction spending for education fell 0.2 percent month-to-month to $73 billion and highway construction spending dropped 2.9 percent to $76.8 billion.