An index of economic activity increased in May, reversing course after an April decline.

The Denver Metro Chamber of Commerce/Rocky Mountain News historic index increased to 132.8 in May from 131.4 in the prior month. May's reading was 1.4 percent higher than the May 2006 level of 131.0.

The two components of the historic index, employment and retail sales, both improved in the month.

• Retail sales, as measured by tax receipts, increased 9.4 percent from April to May, essentially reversing a 9.5 percent drop that occurred from March to April. May sales were up 1.4 percent over May 2006.

• Total employment in the 11-county Denver-Boulder region increased by 12,300 from April to May. The area's total employment count is slightly more than 1.4 million. The May number was 1.8 percent higher than in May 2006.

The leading portion of the index, an indicator of conditions six to nine months down the road, dropped in May to 101.0 from 101.1 in April. Three of the seven components of the index moved in a positive direction, when their 12-month averages are compared with the 12 months ended in May 2006.

Some highlights:

• Single-family home permits in metro Denver slipped from 1,565 in April to 1,426 in May. Total permits fell 38.6 percent for the 12 months ended in May.

• Unemployment claims decreased from 1,121 in April to 1,080 in May. Claims are down 0.2 percent for the 12 months ended in May.

• Average weekly manufacturing hours worked in metro Denver declined to 41.9 in May from 42.0 in April, but still suggest high demand because it remains above typical, 40-hour workweeks. Average weekly manufacturing hours have increased 1.8 percent in the 12 months ended in May.

• The latest Manpower Employment Outlook Survey suggests a softening in hiring. During the July-September period, an estimated 26 percent of Denver-area employers plan to add staff, compared with 42 percent in the second quarter 2007. Hiring expectations for third quarter 2007 are also down from third quarter 2006.

• Mountain region consumer expectations fell from 111.5 in April to 111.4 in May. It remains 1.5 percent above 2006 levels.

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.