Washington: Fears for the US economic recovery were soothed on May 31, by data showing buoyant consumer sentiment, a strengthening industrial heartland and bulging orders at factory gates.

"The three indicators out on June 1, put paid to the notion that the recovery is stalling out," Merrill Lynch Economist Gerald Cohen said.

Among the key figures: People's confidence rose. The University of Michigan's closely watched consumer sentiment index surged faster than expected to 96.9 points in May from 93.0 in April.

Businesses in the US Mid-West picked up the pace. The Chicago Purchasing Management Association's purchasing managers index climbed to 60.8 points in May from 54.7 in April.

Orders for goods rolling out of US factories leapt by a stronger-than-expected 1.2 per cent in April from the previous month, the Commerce Department said.

On Wall Street, the Dow Jones industrials rose just 21.94 points, or 0.22 per cent, to close at 9,933.63 as an early rally gave way to concerns about heightened India- Pakistan tensions.

"In a world in which the direction of stocks seems to determine whether economic news is analysed as good or bad, the latest data on Mid-West manufacturing and national consumer confidence will prove difficult to poison," said Salomon Smith Barney, senior Economist.

Other data out on May 31, confirmed that productivity in US was in top gear. Revised figures showed productivity, or output per hour worked, shot up 8.4 per cent in the first quarter of 2002, a 19-year high.

Economists said the report was a positive sign for the US recovery as well as for a long-awaiting improvement in corporate profits.

"Output increased while hours worked declined. That means profit margins are recovering and that a more broad based recovery that includes more jobs, rising incomes and declining unemployment is not that far away," said Wachovia Securities Economist Mark Vitner.

"The revisions to the productivity and cost data for the first quarter of 2002 were minor and reaffirmed that productivity surged early 2002," said Manufacturers Alliance Chief Economist Daniel Meckstroth.

"The manufacturing sector, which declined all of last year, experienced output growth in the first quarter 2002 but firms continued cutting jobs and hours-worked in those uncertain economic times. The result was extraordinarily large productivity growth and drop in unit labour costs, " he added.