The much-vaunted ‘Baghdad bounce’ may not be as well-sprung as hoped, judged by new US reports.

Many economists hoped that the swift end to the war in Iraq would release pent-up demand and kick-start the American economy into a full blown recovery. However, the monthly index of manufacturing conditions from the Institute for Supply Management actually fell in April to 45.4, down from 46.2 in March. Any reading below 50.0 signals contraction.

Meanwhile, the Labor Department revealed its four-week moving average of new claims for unemployment benefit rose to 442,000, the highest in over twelve months.

Data from car manufacturers also provided little cheer, as overall sales fell 6.2% year-on-year in April. According to Autodata, sales hit a seasonally adjusted annual rate of 16.5 million units last month, compared with 17.3m a year earlier.

There were heavy falls in car purchases for the ‘big three’ auto manufacturers, with General Motors down 9%, Ford Motor Company falling 6.9% and Chrysler Group sliding 10%.

Among foreign manufacturers, there were rises for Honda (+11%) and Hyundai (+8.7%), but declines for Toyota (-0.9%) and Nissan (-4.2%).

Nevertheless, total car sales were up slightly from March’s 16.2m units and February’s 15.5m. “The rebound in April was largely a recovery from the war-induced pullback,” explained Paul Ballew, chief market analyst at GM. “We’re back to where we were at the beginning of the year.”

Data sourced from: The Wall Street Journal Online; additional content by WARC staff