Consumers' outlook on the economy was less rosy in the first half of the month, according to a leading survey released Friday that attempts to gauge the mood of the nation's shoppers.

The University of Michigan's (search) mid-month report on consumer sentiment for January showed that its headline index fell to 95.8 from 97.1 in December, according to people in the market who have seen the subscriber-only report.

The average forecast for the index was 97.0, according to a Dow Jones Newswires (search)/CNBC (search) survey of economists.

Expectations on the economy dragged down the main index as those surveyed reported a more upbeat assessment of current conditions.

Michigan's consumer expectations index to fell to 86.4 from 90.9 in December. The early reading on the current conditions index for mid-January rose more than four points to 110.4 from 106.7.

Consumer confidence gauges such as this are only loosely correlated with actual spending. Market participants, however, keep close tabs on these surveys for any hint of emerging angst among the nation's shoppers.

Consumer spending represents roughly two-thirds of U.S. economic activity and had proved to be an extremely valuable support for the broader economy when business spending pulled back during and after the 2001 recession.

The slight dip in the University of Michigan sentiment index, however, doesn't suggest consumers are feeling overly gloomy, according to Steve Stanley, chief economist at RBS Greenwich Capital.

"Consumer spending was stellar in the second half of last year," he said in a note to clients, "so the current levels of sentiment are certainly not an impediment to robust advances in actual outlays."

In the third quarter, real consumer spending advanced by 5.0 percent, noted Stanley, who estimates expenditures may have grown by 4.5 percent in the fourth quarter.