Consumer Sentiment Survey Rises in April

The end of fighting in Iraq and lower domestic gasoline prices pushed consumer sentiment in April to its highest level since December, the University of Michigan said Friday.

The university’s final consumer sentiment index for April increased to 86, from 77.6 in March, the lowest since August 1993.

This increase in confidence may prompt a rebound in consumer spending and business investment, analysts told Bloomberg, which slowed in the first quarter resulting in growth of 1.6% at an annual rate. (Click here for more of gross domestic product.)

Consumer spending accounts for two-thirds of all economic activity.

In other economic news Friday, sales of new, single-family homes rose by 7.3% to a seasonally adjusted annual rate of 1.012 million in March, the Commerce Department said.

February new-home sales were revised as a 3.3% decline to a 943,000 annual rate.

March new-home sales were boosted by an 82.5% jump in sales in the Northeast, the largest percentage gain in nearly a decade.

The housing market has been strong for the past several years due to record-low mortgage interest rates and rising home values, Reuters reported. Economists expect the housing market to slow later this year if the overall economy improves and interest rates rise.

Sales of existing homes fell to a 5.53 million annual rate in March, a 5.6% decline from February's revised 5.86 million annual pace, the National Association of Realtors said Friday.

The decline in March was the biggest since June 2002.

Meanwhile, Bloomberg said a final reading of 85 had been expected in the Michigan index.

The current conditions index, which reflects American’s perception of their financial situation and whether it's a good time to spend on big-ticket items, climbed to 96.4 this month from 90 in March.

The expectations index, based on optimism about the next one to five years, rose to 79.3, the highest since September, from 69.6 in March.

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