The pace of the U.S. economic rebound may be slowing, manufacturing data hinted on Monday, as concerns grow about the impact of Europe's debt crisis on global growth.

A disappointing profit forecast by the second-largest U.S. home improvement store chain also clouded the recovery outlook.

The New York Federal Reserve said its gauge of manufacturing in New York state showed growth advanced at a slower pace in May. But in a positive sign the jobs index rose to its highest level in about six years.

This is just confirmation that the recovery is not exactly robust, said Peter Kenny, managing director of Knight Equity Markets in Jersey City, New Jersey.

The New York Fed's Empire State general business conditions index fell to 19.11 in May from 31.86 in April. Economists polled by Reuters had expected a May figure of 30.00. Readings of more than zero show growth. The index has now shown growth for 10 straight months.

Shipments and new orders showed a lot of weakness, while the employment picture actually continued to improve. So it shows a shift in rotation ... perhaps a slowing of growth in the manufacturing sector, said Julia Coronado, senior U.S. economist with BNP Paribas in New York.

We do think that some of the boosts to manufacturing

activity in the recent months have been temporary, Coronado added.

US companies are also cautious about the outlook for the economy.

Shares of Lowe's Cos Inc , the home improvement chain, fell nearly 4 percent after it gave a disappointing profit forecast.

We're still somewhat cautious regarding the state of the consumer and the economy as a whole, Lowe's said.

A Reuters poll has shown that the turmoil in European debt markets has economists delaying their forecasts of when the Federal Reserve will start raising rates.

Six weeks ago a majority of the big banks that deal directly with the Fed thought it would raise interest rates before the end of this year. By last week, most predicted the first hike would come in 2011.

We hope the worst of the (European) fallout is that the Federal Reserve has to linger for longer in its present stance, said Citigroup economist Robert DiClemente.

For now, there are some benefits to the United States from investors' growing appetite for dollar-denominated assets stoked by their jitters about European debt. Foreign buying of Treasuries is on the rise, which is helping to keep yields low and borrowing costs cheap for the U.S. government and for consumers.

Data released on Monday showed that foreign investors set a record for purchases of long-term U.S. securities in March, snapping up $140.5 billion and shattering a previous peak seen in 2007, the Treasury Department said on Monday.

As U.S. borrowing costs remain relatively low, there were signs that Americans are managing their debts more tightly, perhaps helped by improvements in the economy

U.S. credit card delinquencies fell for the fourth straight month in April, the latest indicator that Americans are recovering from the worst economic downturn since the Great Depression.

(Additional reporting by Wanfeng Zhou, Dhanya Skariachan, Emily Flitter, Steven C. Johnson, Emily Kaiser, Chuck Mikolajczak and Joe Rauch; Editing by Kenneth Barry)

Manufacturing New Jersey BNP Paribas