Washington ? 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 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 economists were predicting, offered a fresh sign that the housing and residential construction markets continued 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 by a seasonally adjusted 29,000 to 412,000, a three-week low, the Labor Department 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.

On Wall Street, stocks moved lower as IBM offered a cautious business outlook. The Dow Jones industrials lost 46 points and the Nasdaq was down 34 points in morning trading.

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 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 Chairman Alan Greenspan, in appearances this week on Capitol Hill, said the central bank would 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.