Housing Starts are a key indicator of the overall health of the U.S. economy because they create a substantial “ripple effect” into other sectors. Here’s how:

What is the Housing Starts report? This report measures the number of residential housing starts each month. In construction terms, a “start” is when the excavation of a new building’s foundation begins.

What’s happened recently? February Housing Starts rose 5.2 percent from January, above economist’s expectations and a whopping 30.9 percent above the same reading from last February. Building Permits, also a signal of future construction, came in at 1.167 million in February, below expected and down slightly from the January reading.

What’s the bottom line? New construction means a rebound in jobs related to housing, which is good news for the labor market, retail sales and the economy in general. This can also mean some needed relief for renters looking to get out of rising rent situations and homebuyers frustrated by the shortage in housing.