Construction spending in the U.S. increased more than expected in the month of July, according to a report released by the Commerce Department on Friday.

The report said construction spending climbed 0.7 percent to an annual rate of $1.973 trillion in July after rising by 0.6 percent to a revised rate of $1.959 trillion in June.

Economists had expected construction spending growth to match the 0.5 percent increase originally reported for the previous month.

The bigger than expected increase came as spending on private construction jumped by 1.0 percent to an annual rate of $1.549 trillion.

Spending on residential construction surged by 1.4 percent to a rate of $879.0 billion, while spending on non-residential construction rose by 0.5 percent to a rate of $670.0 billion.

Meanwhile, the Commerce Department said spending on public construction fell by 0.4 percent to an annual rate of $423.7 billion.

Spending on highway construction slid by 0.6 percent to a rate of $128.1 billion, while spending on educational construction inched up by 0.1 percent to a rate of $89.8 billion.