World Economic

Fresh signs emerged Monday that the recession is letting up.

Manufacturing’s slide is slowing. Builders are boosting spending on construction — including homes. And consumers aren’t cutting back as much as feared.

A trio of reports gave Wall Street a big lift on the same day that industrial icon General Motors Corp. filed for bankruptcy protection. Economists were especially heartened by a report from the Institute for Supply Management that showed U.S. manufacturing activity shrinking at a slower pace in May.

The institute’s index came in at 42.8 — its highest since September and up from 40.1 in April. A reading below 50 still indicates activity contracted, but the figure surpassed economists’ forecasts. Further, an index of new orders placed with U.S. factories rose to 51.1 in May. It was the first time this barometer had grown since November 2007, the month before the recession began.

"What looked like a flicker of light at the end of the tunnel is now starting to look like a beacon," said Richard Yamarone, economist at Argus Research instant payday loan.

And businesses’ inventories shrank, suggesting supplies will soon need to be replenished. That would boost factory production, aiding overall economic activity.

"The worst has clearly passed for U.S. factories," said Cliff Waldman, economist at Manufacturers Alliance/MAPI, a manufacturing research group. "Nonetheless, a real recovery might be months away. The global economic picture remains difficult …"