U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes, suggesting that the economy was firing on almost all cylinders.

    The Commerce Department report Tuesday added to solid payrolls, retail sales and industrial output data in suggesting the economy got off to a strong start in the third quarter. The steady flow of upbeat economic reports has bolstered views that the Federal Reserve will raise interest rates in September.

    “The Fed is likely to take further reassurance that housing is on an improving trend and this should add to the view that the economy is in more normal territory,” said John Ryding, an economist at RDQ Economics in New York. Groundbreaking increased 0.2 percent to a seasonally adjusted annual pace of 1.21 million units, the highest level since October 2007. June and May starts were revised higher, a sign that builders are growing more confident in the economy.

    Housing starts have now been above a 1 million-unit pace for four straight months. Economists had forecast groundbreaking on new homes rising to a 1.19 million-unit pace last month.

    (SD-Agencies)