* Manufacturing activity holds at near two-year low
* Consumer sentiment unchanged in April
* Construction spending hits six-month low in March
WASHINGTON, May 1 (Reuters) - The U.S. manufacturing expansion held steady at near a two-year low in April, but a jump in consumer sentiment and stronger-than-expected vehicle sales suggested the economy was pulling out of a first-quarter soft patch.
Economic growth almost stalled in the first quarter, slammed by bad weather, a strong dollar, a now-resolved labor dispute at West Coast ports, and lower oil prices, which have cut domestic energy production.
The Institute for Supply Management said its index of national factory activity was at 51.5 in April, matching the March reading, which had been the lowest since May 2013.
A reading above 50 indicates expansion in the manufacturing sector. The employment index fell into contractionary territory for the first time since May 2013, dropping to 48.3, the lowest reading since September 2009.
The tepid manufacturing survey was offset by a report from the University of Michigan showing its overall index on consumer sentiment rose to 95.9 this month from 93.0 in March.
A bullish dollar has hurt export growth and the profits of multinational corporations, including Procter & Gamble Co . Colgate-Palmolive and Johnson & Johnson cut their full-year profit forecasts due to dollar strength.
General Motors Co and Ford Motor Co, however, reported stronger-than-expected U.S. auto sales in April on Friday as robust demand for trucks, and crossover and sports utility vehicles kept the industry on track for its best year in almost a decade.
The economy also faces the headwind of weak crude prices, which have cut domestic energy production and caused oil-field companies to slash spending on exploration and well drilling.
Separately, the Commerce Department said construction spending slipped 0.6 percent to an annual rate of $966.6 billion in March, the lowest level since September.
February’s outlays were revised to show them unchanged instead of the previously reported 0.1 percent dip. Economists polled by Reuters had expected construction spending to rise 0.5 percent in March.
Construction spending was weighed down by a 1.6 percent decline in private residential construction spending, the biggest such decline since June. Outlays for single-family construction fell 1.8 percent and multi-family home building tumbled 2.1 percent.
Spending on private non-residential construction projects rose 1.0 percent in March.
Public construction outlays were weak, with spending on federal government projects tumbling 4.9 percent. State and local government outlays, the largest portion of the public sector segment, fell 1.2 percent to a one-year low. (Reporting By Lucia Mutikani; Editing by Andrea Ricci and Paul Simao)