Strong US factory data offsets a fall in consumer confidence

City A.M. Reporter
POSITIVE economic data from the US boosted markets yesterday, as investors bank on a strong recovery across the pond.

Separate reports showed that demand for long-lasting US manufactured goods surged in February while American single-family home prices started the year with the biggest annual increase since June 2006.

New orders of durable goods were up 5.7 per cent over the month to February, the numbers showed, while shipments grew one per cent, unfilled orders climbed 0.9 per cent, and inventories edged up 0.4 per cent.

Sales of new single-family homes dived 4.6 per cent between January and February, the Census Bureau said. But this monthly dip was not enough to derail annual sales growth, which ticked along at 12.3 per cent in the year to February, despite the monthly fall.

But the Conference Board, an industry group, reported that consumer confidence tumbled in March as Americans turned more pessimistic about short-term economic prospects, adding a note of caution to a market still skittish over Cyprus.

The Conference Board’s consumer confidence index plummeted from 68 in February to 59.7 in March, against economist expectations the measure would remain at 68.

The expectations index slid even further, from 72.4 last month to 60.9, the business data firm said. One hundred refers to the average result recorded in 1985.

“This month’s retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions,” said the Conference Board’s Lynn Franco.