Economy up slightly but threats remain, data shows

The nation’s economy is managing to grow modestly, reports released today show, despite high U.S. unemployment and growing alarm about Europe’s debt crisis. Manufacturing expanded in September more than in August, though the pace of growth remains weak, according to a survey by the Institute for Supply Management. The ISM says its manufacturing index rose for the first time in three months. Construction spending also increased in August, the government reports. The gain was due mostly to a pickup in state and local government projects. In addition, U.S. automakers say its industry’s sales rose in September, largely because consumers bought more pickups and SUVs. Collectively, the reports suggest the U.S. economy may be able to avoid another recession but will continue to struggle. Stocks fell sharply in afternoon trading as worries persisted about Europe’s debt crisis. Greece said today it would miss deficit-reduction targets it had agreed to as part of its bailout agreement, increasing fears Greece could default on its debts and further harm Europe’s economy. Read more on the reports from The Associated Press here.