In a sign that a key sector of the economy remains vibrant, housing starts exceeded expectations in June, jumping 5.6% from May, to a 1.62 million annual rate, the Commerce Department said.

It was the highest figure for starts since February and the 10th consecutive month that starts were above the 1.5 million-unit level. Housing starts are 7.5% higher than a year earlier, said economist Karen Dexter of Merrill Lynch & Co., New York.

Single-family housing starts advanced 2.5% in June, to a 1.25 million- start rate. But the real strength in June was in multifamily starts, which rose 17.4%. Starts rose in all areas of the country except the Northeast.

Housing permits fell 1.7% in June, to a 1.52 million-unit rate. "With permits at a 1.5 million-unit level, we do not expect housing starts to remain at a 1.6 million level for an extended period," Ms. Dexter said.

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