U.S. consumers felt less confident in early August than they did last month as high oil prices and slowing job creation clouded expectations for the economy, according to a private survey published Friday.

The University of Michigan's index of consumer sentiment (search) fell to 94.0 in early August from 96.7 at the end of July, said market sources who saw the subscription-only report. Economists polled by Reuters had expected the index to rise to 97.50.

The current conditions component rose to 108.4 from 105.2 in July, but the expectations index dropped to 84.7 from 9 record highs and heightened security concerns could be taking their toll on confidence.

"You wonder how is the news itself affecting confidence," Wieting added.

"It was down but not out of line with what we're seeing everywhere else — there has been a lot of negative data," said Mark Vitner, senior economist, Wachovia Securities in Charlotte, N.C.

"The economy is slowing but it isn't going in reverse. There is plenty to worry about but there is also some reason to be optimistic, for instance this morning's producer price index showed inflation moderated in July," he said.

Producer prices (search) rose 0.1 percent in July, after a 0.3 percent fall in June as a spike in energy prices was largely offset by a sharp plunge in food costs. Economists had expected a 0.2 percent gain. Also on Friday came news that the U.S. trade deficit widened much more than expected in June, hitting a record $55.8 billion, beyond expectations for $47 billion.

Earlier this week, Investor's Business Daily and TechnoMetrica Market Intelligence said its economic optimism index (search) edged up in early August to 57.7 from 57.3 in July.

Analysts sometimes use sentiment gauges as a means to determine future spending patterns, although there tends to be little correlation between fluctuations in confidence indexes and actual retail sales.