We got more “green shoots” in the economic data this morning.  Stocks are jumping over 2.5% on the “better than expected” news.  The ISM manufacturing index came in better than expected at 42.8.  Analysts had been expecting a reading of 42.  Respondents to the report said:

• “Some amount of havoc is about to erupt, with companies pushing for increased capacity when suppliers have taken capacity offline.” (Computer & Electronic Products)
• “Business is actually better than plan.” (Food, Beverage & Tobacco Products)
• “Realistically, we don’t see any of our major customers looking to place business until mid-2010 at the earliest.” (Machinery)
• “April was flat on sales. May looking better.” (Primary Metals)
• “Business still trending downward, but not as fast.” (Chemical Products)

A reading of 42.8 means the economy is still contracting though at a much slower pace than previous months data.

Personal income and spending also came in better than expected though some investigation throws water on the data.  Personal incomes rose largely due to government benefits such as jobless insurance while personal spending showed a 1.5% year over year decline and a 0.1% month over month decline.