U.S. housing started surging to an eight-month high in July, suggesting the nation’s housing market recovery was back on track after stalling in the second half of last year.

    While the rebound points to sustained economic strength, other data Tuesday showed inflation largely under wraps, which could give the Federal Reserve room to maintain its ultra-easy monetary policy stance for a bit longer.

    “The Fed will find these data further supportive of the go-it-slow approach to exiting its accommodative policies,” said Dan Greenhaus, chief strategist at BTIG in New York.

    Groundbreaking for new housing jumped 15.7 percent last month to a seasonally adjusted 1.09-million unit annual pace, the highest level since November, the Commerce Department said. The gain snapped two straight months of declines and beat economists’ expectations for a rise to only a 969,000-unit rate.

    It was the latest sign the market was regaining its footing after being slammed by a run-up in interest rates last year. A shortage of properties for sale has also lifted prices, pushing housing out of the reach of many first-time buyers.

    Separately, the Labor Department said its Consumer Price Index edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents. The CPI had increased 0.3 percent in June.

    In the 12 months through July, the CPI increased 2.0 percent after advancing 2.1 percent in June.

    While the so-called core CPI, which strips out volatile food and energy costs, ticked up 0.1 percent for a second straight month, economists said there was no evidence the underlying trend in inflation was shifting lower. Rents, which account for more than a third of the CPI basket, increased 0.3 percent in July and were up 2.9 percent from a year ago.(SD-Agencies)