Univ. of Michigan Says Consumer Sentiment Rose Sharply in Early April

In what could be an important sign for the ailing U.S. economy, news services reported Friday that the University of Michigan's closely watched index of consumer confidence rose to to 83.2 for April from 77.6 in March.

That was a much stronger gain than expected by economists and financial markets, which had looked for an index level of about 78 for the school’s preliminary April report, financial wire services said.

The survey’s timing showed that consumer sentiment improved sharply in recent weeks as the U.S. made rapid progress in its war against Iraq.

For months, confidence figures had been weakening amid concerns about war risks, high fuel prices and layoffs in an ailing economy.

Since consumer activity makes up the largest part of the economy, manufacturers had said the weak consumer sentiment in recent months was weighing on orders for new goods, and retailers said it was hampering their sales.

But the confidence rebound in the Michigan survey, if sustained, could lay the basis for more purchases at stores and more orders for factories to restock the shelves.

In another sign that the consumer sector may be recovering, the Commerce Department also reported Friday that retail sales for March rose 2.1% -- the strongest gain in 17 months – after a 1.3% drop in February.

esides the University of Michigan survey, the Conference Board publishes a well-known confidence index and various news organizations produce their own.

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