U.S. construction spending climbed in August to the highest level since 2008, boosted by a surge in outlays for residential projects and giving a sign the housing market was helping the overall economy.

Construction spending increased 0.7% to $1.09 trillion, the highest level since May 2008, the Commerce Department said on Thursday. Economists polled by Reuters had forecast a 0.5% gain.

Construction spending has increased for nine straight months, although the government said July's growth was less sharp than initially estimated.

Construction spending in August was buoyed by a 1.3% jump in private residential construction spending to the highest level since January 2008. Spending on private non-residential construction projects rose 0.2%, hitting its highest level since November 2008.

Public construction outlays rose 0.5%.