U.S. consumer sentiment was stronger than expected in August, a report showed Friday, although expectations of future economic conditions worsened.

The University of Michigan's final reading on consumer sentiment for August was 82.0, above an initial mid-month reading of 78.7 and the 79.5 median forecast of Wall Street economists polled by Reuters, said sources who saw the subscription-only report.

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However it fell short of July's final reading of 84.7.

The survey's index of current conditions edged up to 103.8 from 103.5 in July, but consumer expectations slipped to 68.0 from 72.5.

"It's a good number, better than the market expected, and continues the run of slightly above-expectations data today," said Michael Jansen, currency strategist at National Australia Bank in New York.

The dollar strengthened moderately against the euro and yen, and stocks were also a touch higher, buoyed by an earlier report that showed slightly better-than-expected U.S. job gains last month.

U.S. Treasury debt prices were slightly lower on the day.

Consumer spending accounts for about two-thirds of U.S. economic activity, but in recent years confidence measures have been a weak guide to actual spending.

Consumers' expectations for inflation over the next 12 months rose in August, according to the sources.

The University's August reading on one-year U.S. inflation expectations was 3.8 percent, from 3.2 percent in July.

The five-year inflation expectation gauge revealed a median estimate of 3.2 percent in August, from 2.9 percent in July.

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