NEW YORK – U.S. consumer sentiment fell in April to its lowest in seven months but was better than first estimated this month and above forecasts due to optimism over the recent stock market rally, a survey showed Friday.
The Reuters/University of Michigan Surveys of Consumers said the final April reading of its consumer sentiment index slid to 87.1 from 88.4 in March. It was the third straight monthly fall in the index.
Click here to visit FOXBusiness.com's Economy Center.
April's final result was the lowest since 85.4 in September 2006 but was up from the 85.3 preliminary April reading. The median forecast among analysts polled by Reuters was 85.2. The 54 forecasts ranged from 84.0 to 88.8.
The survey showed increased inflation expectations among consumers, who also fretted over rising gasoline prices and troubles in the housing market. However, the stock market's recent stellar performance did cheer some.
"The small rebound in late April was due to diminished concerns among high income households, with the gains especially strong during the past week when stock prices recorded new record highs," a statement accompanying the Reuters/University of Michigan data said.
Blue-chip stocks on Wall Street cut their losses after the data, as did the dollar. Government bonds trimmed earlier gains.
The survey's gauge of current economic conditions rose to 104.6 from 103.5 in March. Its measure of consumer expectations fell to an eight-month low of 75.9 from 78.7.
"We got a better-than-expected number amid several months of disappointing news. This is the first ray of sunshine befitting a dreary April," said Michael Woolfolk, senior currency strategist at the Bank of New York.
The survey's one-year inflation index jumped to 3.3 percent in April — its highest since 3.8 percent in August 2006 — after holding steady for three months at 3.0 percent.
Its five-year inflation index also rose, to 3.1 percent — its highest since a similar reading in October — after spending two months at 2.9 percent.
The Reuters/University of Michigan Surveys of Consumers, a monthly series of data on U.S. consumer sentiment, are produced by the University of Michigan in Ann Arbor, Michigan. As of January 2007, Reuters has exclusive rights to distribute the data.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox