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Growth in the nation's manufacturing sector expanded at a sharp clip in March, well ahead of analysts' expectations without showing signs of rekindling inflation.

The National Association of Purchasing Management said today its monthly index of business activity, compiled from interviews with corporate purchasing executives nationwide, surged to 54.8 last month from 53.3 in February.

Economists had expected the trade group's figure to be unchanged or slightly lower, reflecting a slowing of the economy because of Asia's financial woes.

But there were no immediate signs in that report or the other two released today that the Asian fallout was hitting hard on American shores.

Meanwhile, in Washington, the Commerce Department reported construction spending rose in February for the third consecutive month, with increases in housing and government construction offsetting a decline in commercial projects.

The 0.3 percent increase, to a seasonally adjusted annual rate of $622 billion, followed stronger gains of 0.7 percent in January and 0.8 percent in December.

In the third report, an important measure of future economic activity was up a sharp 0.4 percent in February, the strongest rise in a year and another sign of the economy's enduring strength.

The Index of Leading Indicators for February stood at 105.0, said the Conference Board, a private research group. Economists had expected the measure to gain a more modest 0.2 percent. It advanced 0.1 percent in January.

House OKs credit union proposal
WASHINGTON (AP) -- Defying the Supreme Court, the House today approved a measure to help federal credit unions by allowing them to continue to include more than one group in their memberships.

By a 411-8 vote, the House passed the bipartisan bill, which would supersede a recent high court ruling that had been sought by the banking industry.

The vote, coming as lawmakers pushed toward adjournment for a two-week spring break, culminated a feverish lobbying campaign by the 70 million-member credit union industry.

The credit unions have portrayed their fight with the banking industry, which has denounced the bill, as a David vs. Goliath struggle. They have been able to compete with banks by often providing lower-cost loans and other services at more favorable rates for their members.

Fed leaves interest rates unchanged
WASHINGTON (Reuters) -- The Federal Reserve left key U.S. interest rates unchanged Tuesday as it weighed the impact on the U.S. economy of Asia's financial crisis against the risk that tight labor markets may cause inflation to rise.

In a terse statement the central bank signaled it had left its target for the overnight federal funds rate, which determines borrowing costs throughout the economy, at 5.5 percent. The discount rate, at which the Fed extends emergency loans to commercial banks, remains at 5.0 percent.

Kodak sets pay hikes of 3% to 6%
ROCHESTER (AP) -- Eastman Kodak Co., in the midst of trimming almost 20,000 jobs, is raising pay scales to bring them in line with industry averages.

Based on job performance, most workers will get pay increases ranging from 3 percent to 6 percent on May 11. The across-the-board raises are the first at Kodak in three years.

Woman gives alma mater $25 million
COLUMBIA, S.C. (AP) -- Investment banker Darla Moore handed her alma mater, the University of South Carolina, $25 million -- and a challenge. She becomes the first woman to have her name on the business school of a major university.

"But there is no substitute for my expectation and my standards for the quality of thought or the quality of product that will emerge from these halls," said Ms. Moore, 43. "I'm not just giving you money, South Carolina, I'm giving you a commission."

After graduation, Ms. Moore went on to Chemical Bank in New York in 1981 and made a name for herself in the bank's bankruptcy financing arm, becoming the highest-paid woman in banking at one point.

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