US housing construction rose last month to the highest since January and the number of people continuing to collect jobless benefits fell to the lowest in two months, signs the economy is beginning to strengthen.

The US economy is still in a recession that began in March 2001, a panel charged with dating US recessions said in its January report.

The US economy is likely to grow by between 2.5% and 3.5% this year, avoiding a slide back into recession, National Bureau of Economic Research (NBER) president Martin Feldstein said.

The US economy, jolted by the September 11 terrorist attacks, weakened further in October and November, the Federal Reserve reported.

Wall Street has extended its advance with a moderate rally that boosted technology stocks but failed to take the Dow Jones industrials above 10,000.

The US entered a recession in March of this year - it's official.