Two key barometers of economic activity moved higher on Tuesday, raising hopes that the US economy may be headed toward a recovery. Consumer confidence rebounded this month, and orders for expensive goods like appliances rose 0.8 percent last month.
Taken together, the reports added to a growing consensus that the economy is strengthening, but economists stopped short of saying that the worst was over. The reports helped send stock prices higher on Wall Street.
Meanwhile, the Federal Reserve's policy-setting committee decided Tuesday to keep short-term interest rates at a 45-year low in an effort to stimulate borrowing and encourage economic activity.
A widely watched measure of consumer confidence rose this month, which the survey-takers attributed largely to improving conditions in the job market.
The Conference Board, a private research organization, reported that its Consumer Confidence Index rose to 81.1 this month, up from a revised 77.0 last month. The reading was well ahead of the 80.0 that analysts had been expecting and came after a decline last month.
Economists keep a careful watch on indicators of consumer confidence since spending by consumers makes up approximately two-thirds of US economic activity. The improvement in the indicator could be a good sign for major retailing companies just ahead of their critical holiday shopping season.
Separately, the Commerce Department reported that factory orders for big-ticket goods rose 0.8 percent last month, reflecting demand for goods including cars, communications equipment and machinery. The "durable" goods measured by this indicator are costly manufactured products expected to last at least three years.
Economists saw the improvement as a positive sign for the manufacturing sector, which has been mired in a deep slump and has had trouble creating new jobs. The rise last month was the best showing since July.
Excluding orders for transportation equipment, which can swing widely from month to month, all other orders for durable goods rose by 1.2 percent last month, marking the fifth consecutive monthly increase.
"Manufacturing has been on the mat for a while now, so now that the sector is seeing some positive movement it's quite positive," said Oscar Gonzalez, an economist with John Hancock Financial Services, based in Boston.
"The trend toward recovery is evident, but the question is whether it's sustainable and whether it will create jobs," Gonzalez said.
The positive economic news helped send stocks higher on Wall Street. The Dow Jones Industrial Average rose more than 107 points to just over 9,715 in afternoon trading.
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