WASHINGTON - American factories enjoyed the biggest jump in orders for costly durable goods in nine months, offering some hope the long-awaited recovery in U.S. capital spending may be on its way.However, a separate report out on Tuesday showed consumer faith in the economy has waned, a sign Americans' spending -- crucial to growth and a mainstay during the business-led slump -- could taper off in coming months.In a reflection of the mixed nature of the data, debt markets focused on the durable goods surge, which dented hopes for further Federal Reserve interest rate cuts, while equity investors fretted about the confidence number and its potential impact on consumer spending.The net effect was that both markets suffered losses.
The Commerce Department said orders for costly items intended to last for three or more years rose in July by 8.7 percent, well ahead of economists' expectations, to a seasonally adjusted $179.74 billion, the biggest monthly rise since last October.But the private New York-based Conference Board said its index of consumer confidence hit a nine-month low in August as Americans rated current economic conditions the worst in nearly eight years.
The effects of the damage to confidence inflicted by whipsawing markets and a halting economic recovery could be seen in the latest chain store sales data, which showed lackluster sales during the first three weeks of August.Instinet's Redbook Retail Sales Average showed that sales slipped 1.6 percent in the first three weeks of the month from the same period in July. A report from Bank of Tokyo-Mitsubishi and UBS Warburg showed chain store sales logged their third straight weekly drop in the week ended Aug. 24. //