U.S. home building jumped in February likely as unseasonably warm weather boosted the construction of single-family houses to near a 9-1/2-year high, suggesting the economy remained on solid ground despite an apparent slowdown in the first quarter.
Other data on Thursday showed a drop in the number of Americans filing new applications for unemployment benefits last week, pointing to a further tightening in the labor market.
The fairly upbeat data came a day after the Federal Reserve raised interest rates for the third time since the 2008 financial crisis. Fed Chair Janet Yellen told reporters that the U.S. central bank was sending a message that "we have confidence in the robustness of the economy and its resilience to shocks."
Housing starts increased 3.0 percent to a seasonally adjusted annual rate of 1.29 million units last month, the Commerce Department said. Economists had forecast groundbreaking activity rising to a rate of 1.26 million units.
Home building was up 6.2 percent compared to February 2016.
Single-family home building, which accounts for the largest share of the residential housing market, surged 6.5 percent to a pace of 872,000 units last month, the highest level since October 2007. Single-family starts rose in the West, Northeast and Midwest, but fell in the South.
Starts for the volatile multi-family housing segment fell 3.7 percent to a pace of 416,000 units.
A robust labor market is supporting the housing market, helping it to buck weakness in other parts of the economy.