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Still, other reports showed that factories continued to struggle in April. The Institute for Supply Management reported factory activity barely expanded in April, held back by weaker hiring and less company stockpiling. And manufacturing output dropped 0.4 percent last month, the Federal Reserve reported earlier this month. Auto companies cranked out fewer cars, factories made fewer consumer goods and most other industries reduced output. One bright spot for the economy has been the American consumer, who has shown surprising resilience this year despite paying higher Social Security taxes. Consumer spending rose from January through March at the fastest pace in more than two years. Auto sales have been rising over the past year. And Americans boosted their spending at retailers in April, from cars and clothes to electronics and appliances. A better job market and a sustained recovery in housing have helped soften some of the impact of the tax increase. Since November, employers have added an average 208,000 jobs a month. That's up from just 138,000 jobs a month during the previous six months. The overall economy grew at an annual rate of 2.5 percent in the January-March quarter, buoyed by the fastest rise in consumer spending in more than two years. Many economists believe growth is slowing to around 2 percent in the current April-June quarter and could stay near or slightly above that level for the rest of the year.
[Associated
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