Housing starts were still well down from last year's level
The number of new houses started in the US rebounded in May from April's record low, the Commerce Department has said.
Housing starts jumped 17.2% to a seasonally adjusted annual rate of 532,000 units in May, up from April's figure of 454,000.
However, the rate was still down 45.2% from May 2008.
Also on Tuesday, the Federal Reserve said industrial production fell 1.1% in May from April, which was worse than had been expected.
Speaking on the housing figures, Zach Pandl at Nomura Securities in New York said: "This starts report is actually very encouraging. Single-family housing starts, where the core of the inventory problem is in the housing market, are really coming back at a good pace.
"I would emphasise though that housing activity does remain at extraordinarily low levels, we really need to come back strongly from here."
Among the biggest falling sectors in the industrial production figures was cars and car parts, which declined 7.9%, having fallen 1.2% in April.
Machinery production dropped 3.4% in May following April's 2.5% decline.
"It's a soft report, consistent with an economy that is still in recession and contracting," said Michael Moran at Daiwa Securities in New York.
"I suspect that the Chrysler bankruptcy was an important factor affecting the motor vehicle sector. The manufacturing sector is still weak."