The number of new housing projects builders broke ground on in June climbed to the highest level in five months, good news for efforts to get the economy back into shape.

The Commerce Department (search) reported Thursday that housing construction rose 3.7 percent from May to a seasonally adjusted annual rate of 1.80 million units, the highest level since January.

June's performance, stronger than the 1.75 million pace that economists were predicting, offered a fresh sign that the housing and residential construction markets continue to serve as one of the national economy's few pillars of support.

In a second report, the number of American workers filing new claims for unemployment benefits last week dropped to by a seasonally adjusted 29,000 to 412,000, a three-week low, the Labor Department (search) said.

Although claims remain above 400,000, a level associated with a sluggish jobs market, the bigger-than-expected decline offered hope that the pace of layoffs may be stabilizing.

The reports came as a group of academic economists declared the 2001 recession officially over.

The National Bureau of Economic Research (search), the recognized arbiter of when recessions begin and end in the United States, said on Thursday that it has determined the recession ended in November 2001, only eight months after it began.

The increase in housing construction in June came despite wet weather in some parts of the country and followed a sizable 6.8 percent advance registered in May.

A monthly survey by the National Association of Home Builders (search) said builders are bullish about sales prospects for July as well as in the next six months.

Low mortgage rates are powering the housing market and keeping home-mortgage refinancing activity brisk. Economists expect home sales to break another record this year.

Extra cash from refinancing along with solid home-value appreciation are underpinning consumer spending, one of the main forces keeping the economy going.

Federal Reserve (search) Chairman Alan Greenspan (search), in appearances on Capitol Hill this week, said the central bank will keep short-term interest rates low in the months ahead and possibly cut them in an effort to get the economy back to full throttle.

The Fed cut a key short-term rate on June 25 by one-quarter percentage point to 1 percent, a 45-year low. Economists believe policy-makers will hold rates at that level at their next meeting on Aug. 12.

In the construction report, the number of single-family homes that builders began work on in June rose by 5.3 percent from the previous month to an annual rate of 1.46 million units. However, the number of apartments, condos and other multifamily housing projects dropped by 4.3 percent in June to a rate of 312,000.

By region, housing construction in the Northeast rose to a rate of 156,000 in June, a 9.9 percent jump from May's level. In the West, builders broke ground on housing units at a rate of 486,000, representing an 8 percent increase. Housing starts in the South rose 2.3 percent to a rate of 803,000. But housing construction in the Midwest decreased by 0.8 percent to a pace of 358,000.

Housing permits, a good sign of current demand, rose by 0.8 percent in June from May to a rate of 1.82 million units. Permits for single-family homes jumped by 5.3 percent to a rate of 1.42 million, a record monthly level.