Consumers buying more

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WASHINGTON — Economic reports due out this week are likely to show U.S. consumers are growing more confident and spending more at auto dealers and department stores than they have in six months, prompting a surge in factory orders.

The Commerce Department is expected to report tomorrow that personal spending for goods and services rose 0.7 percent in April, according to a survey of economists.

Optimism among Americans has risen since the September terrorist attacks and that's reflected in robust sales of General Motors Corp. cars and Tommy Hilfiger Corp. clothing. Increased optimism suggests personal spending will bolster growth in the second quarter as the economy rebounds from recession.

"The strength of consumer spending is going to be a great kickoff for the second quarter," said Chris Rupkey, senior financial economist at the Bank of Tokyo-Mitsubishi Ltd. in New York.

The economy expanded at a 5.6 percent annual rate in the first quarter, the strongest in almost two years, the government said last week. Personal consumption was responsible for almost half of the growth.

"Large tax refunds, low mortgage rates, cheap auto financing rates, price discounting and modest hiring are boosting consumer attitudes," said Steven Wood, chief economist at FinancialOxygen Inc. in Walnut Creek, Calif.

Personal incomes probably rose 0.3 percent in April, economists expect the Commerce Department to report. That would mark the fifth straight rise.

As incomes and consumer spending rise, companies are ramping up production. General Motors and DaimlerChrysler AG's Chrysler unit are scheduling additional overtime. Both automakers said last week that they scheduled extra hours at 10 factories.

Cars and light trucks sold at a 17.3 million annual rate in April. That was up from a 16.4 million pace in March and the strongest since November, according to industry figures.

Meanwhile interest rates are staying low. Rates for 30-year and 15-year mortgages around the country dropped last week.

Freddie Mac, the mortgage company, reported that the average interest rate on 30-year fixed-rate mortgages declined to 6.81 percent last week from 6.89 percent the previous week. A year ago this time, 30-year mortgages averaged 7.20 percent.

Rates on 30-year mortgages hit a low of 6.45 percent in early November, their lowest point since Freddie Mac began conducting its nationwide survey in 1971.