By Seth Sutel
The Associated Press

NEW YORK - Two key barometers of economic activity moved higher Tuesday, raising hopes that the economy might be headed toward a recovery. Consumer confidence rebounded in October, and orders for expensive goods such as appliances rose 0.8 percent in September.

Taken together, the reports added to a growing consensus that the economy is strengthening, but economists stopped short of saying the worst was over.

A widely watched measure of consumer confidence rose in October, 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 in October, up from a revised 77.0 in September. The reading was well ahead of the 80.0 that analysts had been expecting and came after a decline in September.

Economists keep a careful watch on indicators of consumer confidence since spending by consumers makes up about two-thirds of U.S. economic activity. The improvement in the indicator could be a good sign for major retailing companies just ahead of their critical holiday shopping season.

The Conference Board's measure of consumer confidence has fluctuated in a tight range since April, when it rebounded strongly following the end of major military operations in Iraq.

Before that, it had been declining steadily since the spring of 2002.

"This kind of roller-coaster ride is very common when you're coming out of a recession," said Lynn Franco, director of the board's consumer research center. "I think if we get another month or two of improvement, we'll be on the path toward more sustainable gains in confidence."

Separately, the Commerce Department that factors orders for big-ticket goods rose 0.8 percent in September, 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 in September 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 in September, marking the fifth consecutive monthly increase.