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Despite heightened volatility and uncertainty in the financial markets, the U.S. economy continued to show promising signs of recovery. Construction spending in April rose the most in nearly a decade, and manufacturing expanded for the tenth straight month. The ISM Manufacturing Index’s most recent reading was 59.7 (readings above 50 indicate an expansion), a slight decrease of 0.7 from the prior month. The manufacturing employment index, which measures industrial employers’ willingness to hire, rose 1.3 points to 59.8, which is the highest level since May 2004. New home sales rose 14.8% in April, largely in reaction to the second expiration of the first-time home buyers’ tax credit. Consumer confidence was better than expected, increasing to 63.3 from 57.7 in the prior month. Finally, the government revised its first quarter GDP estimate to 3.0% (down slightly from the first estimate of 3.2%), confirming that the economy continued to grow, albeit at a slightly slower pace than originally expected.
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