Manufacturing in the United States grew more than expected in September, the first time since May. Employment and new orders both increased, but the slow rate of growth indicated the economy is only cautiously moving out of the recession.

The index of national factory activity rose from 49.6 to 51.5 in August, said The Institute for Supply Management on Monday

"We're not quite at the point where things are good, but this indicates strongly that things are not so bad," said Adam Sarhan, chief executive of Sarhan Capital.

A rating above 50 indicates expansion in the ecomony, while below 50 indicates contraction. This is the first time since May the index has indicated expansion.

Stocks climbed after the figures showed U.S. manufacturers are holding up compared to their competitors overseas. Strong motor vehicle sales and a bounce in demand for materials for home construction materials helped protect manufacturers from lower and cuts in business investment.

Federal Reserve Chairman Ben Bernanke restated a promise to maintain record levels of government stimulus. He said he expects the economy to improve significantly by 2015.

"We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens," said Bernanke in a speech to the Economic Club of Indiana on Monday.

The small improvement in American. manufacturing demonstrates that domestic manufacturing is performing better than sectors in Europe and Asia. Overseas indexes show that their manufacturing industries are still in decline.

The ISM report beat out Wall Street's expectations. Most economists expected the index to remain below 50 for the fourth straight month.

Overseas manufacturers also showed in September, though most were still below the 50 mark, so they are still shrinking, though not as quickly as before.

European manufacturing is in its fourteenth month of decline, and the third quarter of this year was the worst quarter for Europe in three years.

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