WASHINGTON, May 27 (Reuters) - Orders for long-lasting U.S. manufactured goods unexpectedly rose in April and consumer confidence perked up in May, supporting views of a rebound in economic growth this quarter.
Other data on Tuesday showed underlying strength in the housing market as home prices continued to increase in March. Services industries, which dominate the economy, grew at a steady clip in May.
"It appears that the economy continues to bounce back from the harsh winter," said John Ryding, chief economist at RDQ Economics in New York.
Durable goods orders increased 0.8 percent as demand for defense capital goods surged and orders for fabricated metal products, transportation equipment and electrical equipment, appliances and components rose, the Commerce Department said.
Durable goods range from toasters to aircraft and are meant to last three years or more. Orders advanced by a revised 3.6 percent in March. Economists had forecast orders falling 0.5 percent after a previously reported 2.5 percent rise in March.
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While non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 percent, March's orders were revised to a 4.7 percent gain.
That was the largest rise since November and economists said it would be a boost to second-quarter business spending. Orders for the so-called core capital goods were previously reported to have risen 2.9 percent in March.
Separately, the Conference Board said its index of consumer attitudes rose to 83 in May from 81.7 in April. Improving household confidence should boost consumer spending, which accounts for more than two-thirds of U.S. economic activity.
Another report showed house prices continued to appreciate in March. The pace, however, is moderating a bit. That could help the housing market, where rising house prices and high mortgage rates have undercut home sales.
The Standard & Poor's/Case Shiller gauge of house prices in 20 metropolitan areas increased 12.4 percent in March from a year ago. The reports helped to support U.S. stocks.
Prices for U.S. Treasury debt fell, while the dollar was little changed against a basket of currencies.
SHIPMENTS FALL
The durable goods report showed core capital goods shipments fell 0.4 percent last month. Shipments of core capital goods are used to calculate equipment spending in the government's GDP measurement. They increased 2.1 percent in March.
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Business are placing fewer orders while working through a stockpile of goods amassed in the second half of 2013. Last month, durable goods inventories rose 0.1 percent after increasing 0.2 percent in March.
Morgan Stanley lowered its second-quarter growth estimate to an annual pace of 3.7 percent from 3.9 percent. Economists expect the government will cut its first-quarter GDP growth estimate to show the economy contracted instead of growing at a 0.1 percent rate as it reported last month.
Orders for defense capital goods jumped 39.3 percent, the largest rise since December 2012. Transportation equipment rose even as bookings for civilian aircraft and automobiles fell.
There were declines in orders for machinery, primary metals and computers and electronic products. Unfilled orders rose solidly in April, an indication that factory activity will continue to push ahead.
Separately, financial data firm Markit said its "flash" services Purchasing Managers Index rose to 58.4 in May from 55.0 in April. A reading above 50 signals expansion in services sector activity.
