The U.S. ISM index came in below expectations, but it was high enough to soothe economists’ fretting over the recovery.

The U.S. ISM index dropped to 53.9 in April from 55.6 in March, notes RBC Financial. This is slightly below expectations, but RBC says, “nevertheless the third consecutive reading that showed expansion in the U.S. industrial sector, which is good news for the sustainability of the recovery.” A reading above 50 indicates expansion.

“The siege is over — U.S. factory output is growing again,” it announces. “The new orders component eased back from last month’s 15-year high of 65.3 to a more sustainable 59, accounting for the bulk of the drop in the overall index. Other components showed mixed movements. Notably, the inventories and employment sub-indexes were still below 50 indicating contraction.”

It says, “In all, the release was positive. Although the pace of the manufacturing sector recovery has backed off slightly in April, there is still growth and it is coming alongside a return in pricing power, which should spell higher profits later in the year and keep the recovery going as the consumer sector bows out of the leadership position in the second half of 2002.”