US orders for durable goods in July rose at the fastest pace since November. This was led by the strongest increase in a decade of a key measure of US business investment, according to figures released yesterday.

The Commerce Department said orders for non-military capital goods, or business equipment, jumped 13.5 per cent in July the third increase in four months and the largest since 1992. Increases in orders for computers and communication equipment were the strongest this year. The report supplied some of the strongest indications yet that America's two-year investment slump is ending and that the economy's recovery from last year's recession may have been delayed - but not derailed - by recent market turmoil and corporate distrust .

But the figures contained in a monthly report on factory orders for durable goods are volatile and a separate report yesterday from the Conference Board, a New York business research group, highlighted a threat to consumer spending. It said the drop in its consumer confidence index that began in May accelerated in August.

The index, based on a survey of 5,000 households, fell to 93.5 this month, its lowest since November, from 97.4 in July.

The report showed that while consumer expectations dipped mildly, their assessment of current conditions dropped sharply.

The Conference Board said the decline was "a strong signal that business conditions have yet to turn around", though "consumer expectations . . . remain at levels that historically point to a continued, but slow, economic expansion".

Mr Alan Greenspan, Federal Reserve chairman, and other policymakers have questioned the usefulness of such surveys as leading indicators, pointing to strength in sales of cars and homes. - (Financial Times Service)