U.S. manufacturing contraction slows in April, ISM says

The closely watched ISM purchasing managers' index rose to 40.1% from 36.3% in March. It's the highest since September, when the global financial crisis intensified.
Generally, readings below the 50% mark show most firms think business is still getting worse.
The rise over 40% "shows a significant improvement," said Norbert Ore, chairman of the Tempe, Ariz.-based ISM's survey committee. "While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again."
During this recession, output in manufacturing has fallen at the fastest pace since the end of World War II in the mid-1940s, according to separate data from the Federal Reserve. See full story.
"The ISM index suggests continued weak production," wrote John Silvia, chief economist for Wachovia. "Growth is not expected to return anytime soon."
"We need to view the move with caution," wrote Merrill Lynch economists Drew Matus and David Rosenberg. "The uncertainty surrounding the auto sector seems likely to crimp activity and could drive this series sharply lower in the near term."
Notably, the price of copper, one of the most economically sensitive commodities, rose for the second straight month. Prices of other metals continued to fall.
The April reading of 40.1% was better than the 39.1% expected by economists. The ISM gauge, which has been below 50 for 15 straight months, bottomed at a 28-year low of 32.9% in December.
Only one of 18 major manufacturing industries -- miscellaneous manufacturing -- was growing in April, the ISM's data showed.
None of the major subindexes showed any growth in April, but they all improved from March.
The new orders index rose to 47.2% from 41.2% in March. Six industries reported growth in orders.
The production index also rose, increasing to 40.4% from 36.4% in March. Three industries reported higher production in April.
The employment index rose 34.4% from 28.1% in March.
The inventory index gained to 33.6% from 32.2%, a slower pace of inventory liquidation.
In other reports released Friday, consumers' sentiment bounced higher in April on optimism about President Barack Obama's policies and the rally in the stock market, Reuters and the University of Michigan reported. Their index rose to 65.1 in April, the highest since September, from 57.3 in March. link..