Consumer Survey Shows Greatest Confidence Since ’90 : Economy: Nationwide, sales of existing homes revived in March--but fell 3.3% in California.

Consumer confidence in the economy rose to the highest level in nearly five years this month as more Americans expressed optimism about their financial security, a widely followed survey released Tuesday shows.

Meanwhile, falling mortgage rates helped revive sales of existing homes nationwide in March, although sales in California declined 3.3%, partly because of bad weather.

Analysts said the reports--along with one showing just a 2.9% gain in worker pay and benefits for the year ended March 31--are consistent with the Federal Reserve Board’s goal of low inflation in a slower but still-growing economy.

“We’ve got a very nice picture here,” said economist Eugene Sherman of M.A. Shapiro & Co. in New York, who added that the reports should allay fears of any Fed interest rate increase soon.

The consumer confidence survey by the New York-based Conference Board business research group suggests that the U.S. economy has plenty of vitality left, despite recent signs of weakness. But it also shows that many Americans are wary about spending huge sums after having splurged on cars, computers and other pricey items in recent months. That’s an indicator that the pace of economic growth--while still robust--will slow.

“The buying plans in this survey were mixed,” said Gary Ciminero, chief economist at Fleet Financial Group, New England’s biggest banking company. “Consumers are pretty much sated after chowing down all these durable goods.”

An index based on survey results rose to 105.5 from a revised reading of 100.2 in March. That’s the second straight monthly advance, and it puts the index at the highest level since a 116.16 reading in July, 1990, just before confidence plummeted when Iraq invaded Kuwait, precipitating the Persian Gulf War.

The latest results show that more survey respondents feel job conditions are improving and that local business conditions are good. Optimists outnumbered pessimists by nearly 3 to 1. The index is derived from responses to a survey of 5,000 American households nationwide.

On the home-buying front, the National Assn. of Realtors said sales of existing homes rebounded 5.8% in March to a seasonally adjusted annual rate of 3.62 million, the first increase in three months. All U.S. regions shared in the gain. The real estate group said falling mortgage rates combined with a stable economy lured consumers back into the market. In California, sales of existing homes fell to a seasonally adjusted annual rate of 390,490, down from a revised annualized rate of 403,700 for February.

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Consumer Confidence

From a monthly survey of 5,000 U.S. households, index: 1985 = 100, April 1995: 105.5

Source: Conference Board Homes Sales

Existing units, seasonally adjusted annual rate, in millions, March 1995: 3.62

Source: National Assn. of Realtors