General Electric (GE) capped a week of resurgent confidence in corporate America with news yesterday of a 19 per cent jump in orders.

Positive news from the sprawling conglomerate, increasingly a bellwether for global economic demand, was supported by fresh data that showed US consumer confidence has climbed to its strongest level in more than three years.

Increased spending by consumers and companies was also apparent in strong earnings statements over the past two days by companies ranging from Home Depot in retailing, to Abbott Labs in healthcare and IBM and Juniper Networks in technology.

The combination of rising corporate profits and consumer confidence is encouraging many companies to consider deals and investments put on hold during the scandals and global crises of last year. Many commentators predict that JP Morgan's $58 billion (€46.9 billion) bid for Bank One on Wednesday may herald the return of more widespread consolidation in US markets.

Corporate data released yesterday also suggest the restored confidence is more than just a US phenomenon, with GE in particular pointing to China as a source for increased demand for infrastructure and commodity suppliers throughout the world.

GE chairman and chief executive Mr Jeff Immelt said: "The economy is definitely improving and we have got strong momentum across a fairly broad base going into 2004."

But others cautioned that the dependence on China and the US consumer may make this a fragile recovery.

Mr Kurt Schangsinger, a fund manager at Merrill Lynch in New York, said: "My only concern [about GE] is that they, like everyone else, seem to talk about China a lot in many of their businesses. If Chinese growth slows, then we will all feel it."

Economists were also surprised by the size of the increase in the University of Michigan's consumer sentiment index, which registered its biggest monthly rise since 1992, jumping over 10 points to 103.2 in January.

US economist at HSBC Mr Ian Morris said: "The hope must be that the rise in confidence suggests employment conditions improved in January."

But he stressed there was no evidence that this was the cause of the surge in confidence.

Figures last week showed that the US economy was creating jobs at a glacial pace, with only 1,000 jobs generated in December.

Mr Joe Abate, a US economist at Lehman Brothers in New York, said: "If the labour market continues to lag we would expect it to take its toll on sentiment." - (Financial Times Service)