Manufacturing in the Philadelphia region contracted in April at a slower pace than forecast as orders and sales began to stabilize. The Federal Reserve Bank of Philadelphia’s general economic index increased to minus 24.4 this month from minus 35 in March, the bank said today. Negative numbers signal contraction. Combined with figures from the New York Fed yesterday, the report supports the views of President Barack Obama and Federal Reserve Chairman Ben S. Bernanke that the economy is showing signs of progress even as challenges remain. Manufacturing and housing were among the industries causing the recession, now in its second year, to deepen. “We’re still seeing big declines in manufacturing but we can certainly look ahead a couple of months and see a light at the end of the tunnel,” Christopher Low, chief economist at FTN Financial in New York, said before the report. “Once inventories are back in line, manufacturing can recover.” Economists forecast the index would improve to minus 32, according to the median of 51 estimates in a Bloomberg News survey. Projections ranged from minus 28 to minus 40. Earlier today, a report from the Commerce Department showed housing starts decreased in March to an annual rate of 510,000, fewer than projected and down 11 percent from the prior month. The level was still higher than the record-low 488,000 pace reached in January, indicating residential construction may be stabilizing after collapsing over the last three years. The number of Americans applying for jobless benefits unexpectedly dropped last week to the lowest level in almost three months, the Labor Department also reported. Initial jobless claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January. Still, the number of people collecting benefits jumped to a record 6.02 million a week earlier, indicating companies are not hiring even as firings slow.

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