2 Key Indexes Point to Solid Economy : Indicators: Consumer confidence dips in August but remains near 30-year high. Manufacturing shows continued growth.

Consumer confidence fell for the second straight month in August as interest rates rose, but economic activity in the manufacturing sector grew for the seventh consecutive month, according to two reports released Tuesday.

The Conference Board, a private business group, said its consumer confidence index, which measures consumers’ willingness to spend, edged down 0.4 point, less than analysts expected, to 135.8 from a revised 136.2 in July, but that it was still close to the 30-year high reached in June.

Separately, the National Assn. of Purchasing Management, also a private group, said its index measuring industrial activity rose to 54.2% from 53.4% in July. A reading above 50 indicates growth. Its price index, which tracks prices paid by industry for raw materials and supplies, rose 5.1 percentage points to 59.8%.

The purchasing executives’ report had been scheduled for release today but was mistakenly released on Tuesday, the group said.

The two reports portray an economy that remains strong.

“The overall picture is one of continuing growth in manufacturing activity during the month of August,” said Norbert J. Ore, chairman of the National Assn. of Purchasing Management’s business survey committee. “Production and new orders remain positive and provide encouragement that the manufacturing sector will continue on a path of growth into the second half of the year.”

The declines in consumer confidence in July and August came after eight consecutive months of increases culminating in the 30-year-high reading of 139 in June.

“The numbers are just still so high,” said Diane Swonk, chief economist with Chicago-based Bank One Corp. “Consumers are still willing to spend at a fairly rapid clip.”

Consumer sentiment is an important economic indicator because consumer spending accounts for two-thirds of the nation’s overall economic activity.

Consumers are less confident about current economic conditions and job prospects than they were in July, the survey said, and there were slight increases in the proportions saying business conditions are bad and that jobs are hard to get.

But the dip in optimism in August did not carry over into Americans’ expectations for the next six months. About 17% of consumers expect business conditions to get better, roughly the same as in July. About 17.5% predict the job market will improve during the next six months, up a bit from July.

The consumer confidence survey is based on a representative sample of 5,000 U.S. households. The monthly poll is conducted for the Conference Board by NFO Research Inc. of Greenwich, Conn.

The survey of purchasing managers is compiled from monthly replies to a survey of executives in more than 300 industrial companies.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Purchasing Managers Index

Tracks overall business activity of more than 300 industrial firms.

August: 54.2%

Source: National Assn. of Purchasing Management

Consumer Confidence

From a monthly survey of 5,000 U.S. households. Index: 1985=100.

August: 135.8

Source: Conference Board