Consumer sentiment about the U.S. economy remained high in April, even as the Commerce Department said U.S. economic output increased at the slowest pace in three years.
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The University of Michigan said Friday that its final reading of consumer sentiment was 97 in April, compared with March's final reading of 96.9 and April's initial reading of 98. It is up 9% from April 2016.
Economists surveyed by The Wall Street Journal had expected an April final reading of 97.9.
The index reflecting sentiment on current economic conditions rose 5.6% to 112.7 from last April as the index of expectations rose 12% from a year ago to 87.
The recent rise in optimism, which saw a boost after President Donald Trump's election in November, reflects a turnaround from consumers' attitudes in October, when sentiment had matched a two-year low.
Friday's report also highlights the gap between "hard" and "soft" economic data. Soft data comprises various poll-driven reports, such as consumer confidence and business surveys while "hard" data comprises economic reports that measure actual activity, such as retail sales and durable-goods orders.
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The Commerce Department said that gross domestic product, the broadest measure of goods and services produced in the U.S., rose 0.7%, at a seasonally adjusted annual rate, in the January through March quarter.
Inflation expectations, a measure closely watched by the Federal Reserve, remained steady in April. Consumers said they expect inflation of 2.5% in the coming 12 months and 2.4% in the coming five years, both figures equaling their March values.
The Fed in March voted to raise short-term interest rates and it is expected to push for additional rate increases if economic conditions continue to improve.
As in recent months, the survey also showed continued widespread disagreement about future U.S. economic prospects along political party lines.
"Although the partisan divide has slightly narrowed in recent months, it still reflects a very pessimistic economic outlook among Democrats and a very optimistic outlook among Republicans," said Richard Curtin, the survey's chief economist. "Selective perception of news is the driving force behind the partisan divide."
Republicans cited favorable economic developments while Democrats reported on negative economic news. This divide will continue to add uncertainty and instability to consumer spending, Curtin said.
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(END) Dow Jones Newswires
April 28, 2017 11:44 ET (15:44 GMT)