updated 4/30/2004 11:53:20 AM ET 2004-04-30T15:53:20

Consumers grew a bit less optimistic about the economy in April, according to a report released Friday.

Major Market Indices

Those who had seen the final University of Michigan consumer sentiment index for April said that it had fallen to 94.2, from 95.8 in March. In the preliminary report, the April sentiment index was said to have moved to a 93.2.

The Michigan report is released only to subscribers. It’s based on a telephone survey of around 500 households. Economists surveyed by Dow Jones Newswires had expected to see a softening to 94.0.

Sources who had seen the report said that the index for consumer expectations had fallen to 87.3 in April, from 88.8 in the prior month. The preliminary April level had been 86.2.

Meanwhile, the current conditions index also slid from the prior month, moving to 105.0 in April from 106.8 in March. The preliminary April current conditions level was 104.1.

The softening in the Michigan data highlights the troublesome nature of consumer confidence readings. Economic data released during April showed that hiring and retail spending improved at a much better pace than forecasters had expected. Indeed, the strength was such that markets moved up their expectations of when the Federal Reserve would greet the growth with higher interest rates.

Another more broad-based measure of consumer attitudes, the Conference Board’s confidence survey, showed a much different reading for the same month. Its April reading was 92.9, up from 88.5 for March. It also showed a boost in optimism over hiring.

Policy makers are mindful of consumer confidence data but don’t place too much emphasis on them. Federal Reserve officials have said frequently that it’s more important what consumers do with their money than what they say they think about the economy.

Steve Stanley, chief economist at RBS Greenwich, said the marginal decline in April mainly reflected surging gasoline prices.

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