WASHINGTON (AP) _ Spending on construction projects around the country shot up by 2.7 percent in January, the biggest increase in nearly two years.

The Commerce Department reported today that spending surged to a seasonally adjusted annual rate of $751.8 billion, an all-time-high monthly level. The jump was led by substantial increases in spending on housing, commercial buildings and big government projects.

January's performance was much stronger than the slim 0.1 percent increase many analysts were projecting. Some analysts had even predicted a decline. The 2.7 percent advance marked the strongest pace since a 3.7 percent rise in June 1998.

In December, construction spending rose by 2.1 percent, slightly more than the government estimated one month ago.

The Federal Reserve has boosted interest rates four times since June, totaling a full percentage point, in an effort to slow the sizzling economy and keep inflation at bay.

But economists said those rate increases haven't had much of an impact. In the last three months of 1999, the economy grew by a supercharged 6.9 percent rate. Given the outlook for strong continuing growth, there is wide expectation the Fed will boost rates again March 21.

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