ISM factory index rises to 1-year high of 54.7%

By Rex Nutting, MarketWatch
Last Update: 11:08 AM ET May 2, 2007
WASHINGTON (MarketWatch) -- U.S. factory activity improved in April after seven weak months, easing fears about the fragile U.S. economic expansion.
The Institute for Supply Management manufacturing index rose to 54.7% in April from 50.9% in March, the private trade group reported Tuesday. It's the highest since 54.7% in May 2006.
Economists surveyed by MarketWatch were expecting the index to remain relatively soft at 51%. See Economic Calendar.
The report was very strong, economists said. At 54.7%, the ISM is consistent with growth of 4% in the economy.
"If sustained, this would cast serious doubt on our view that the economy will slow further," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics, in an email. "The next ISM is now of critical importance to the bear story."

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