Construction spending in the U.S. rose by more than expected in the month of July, according to a report released by the Commerce Department on Tuesday, with an increase in spending on private construction more than offsetting a drop in spending on public construction.

The report said construction spending rose 0.6 percent to a seasonally adjusted annual rate of $900.8 billion in July. Economists had been expecting spending to increase by about 0.3 percent.

Revised data showed that construction spending was roughly unchanged in June following a 2 percent increase in May. Spending was originally said to have fallen by 0.6 percent in June.

The increase in construction spending in July came as spending on private construction rose by 0.9 percent to an annual rate of $631.4 billion.

Spending on residential construction increased by 0.6 percent to an annual rate of $334.6 billion, while spending on non-residential construction surged up by 1.3 percent to an annual rate of $296.8 billion.

Meanwhile, the report said spending on public construction dropped by 0.3 percent to an annual rate of $269.4 billion in July.

The Commerce Department said spending on state and local construction dipped 0.4 percent to an annual rate of $245.4 billion, while spending on federal construction rose 1.1 percent to $24.0 billion.