Washington ? The economy is being boosted by higher retail sales, stronger factory output and a rise in companies’ stockpiles.

That picture emerged from reports Friday pointing to an economy that’s improving modestly but steadily after the worst recession in decades. Yet the recovery needs stronger job creation, and it remains under pressure from fears that Europe’s debt crisis could slow the U.S. economy.

“The decent gains in payroll employment in recent months have improved the outlook for spending,” said Paul Dales, an economist at Capital Economics. But Dales said he expects a sub-par recovery because of high unemployment, tight credit and still-high debt loads.

Consumers drove retail sales up 0.4 percent last month. The gain was less than the 2.1 percent growth in March. But that surge was boosted by an early Easter and auto incentives.

Shoppers are closely watched because their spending accounts for 70 percent of economic activity. It rose in the first three months of this year at the fastest pace in three years, according to the Commerce Department report.