NEW YORK (CNN/Money) - A closely watched measure of consumer confidence in the United States fell in August, according to a published report Tuesday, missing Wall Street forecasts for a gain.

The University of Michigan's consumer sentiment index fell to 90.2 from 90.9 in July, according to market sources quoted by Reuters. Economists, on average, expected a reading of 91, according to a Reuters poll.

"While it's a bit of a surprise, the slightly downbeat news on confidence can be explained by the ongoing weakness in employment, and perhaps consumers are a little concerned about the backup in mortgage rates," said Douglas Porter, senior economist at BMO Nesbitt Burns. "But while they're becoming less confident, they're still buying -- the latest sales numbers still look good."

In the university's report, available only to paying subscribers, the "current conditions" component of the index, which measures how consumers feel about their present situation, rose to 100.5 from 94.7, Reuters said.

The "expectations" component of the index, which measures how consumers think the economy will perform in the next 12 months, was flat at 83.6, matching July's level, according to the report.

U.S. stock prices briefly turned mixed after the report, but later recovered. Treasury bond prices continued to trade mostly lower.

Wall Street pays close attention to consumers, whose spending makes up more than two-thirds of the entire economy.

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Though consumer confidence has been buffeted by a recession and terror attacks in 2001, corporate scandals in 2002, war in 2003, a bull market in stocks and lingering labor-market weakness, consumers have kept spending -- they almost always do.

Even in the days during and immediately after last week's blackout, consumers hit retail stores, according to separate reports Tuesday.

Spending has been supported in large part by super-low interest rates, which have spurred a boom in mortgage refinancing and demand for homes. Homeowners have been able to refinance for lower monthly payments and tap into their surging home equity.

Interest rates, including long-term mortgage rates, have risen recently, however, putting a damper on the housing market. The burden of supporting consumer confidence likely now shifts to businesses, which must start hiring in significant numbers if sentiment is going to rise again.

Non-farm payrolls are nearly 2.7 million jobs lighter than they were in March 2001, when economists at the National Bureau of Economic Research said the latest recession began. Though the NBER said the recession ended in November 2001, payrolls still haven't shown consistent growth, and probably won't for at least a few more months, even if all goes well.

"I suspect there will be enough positive news in other areas to persuade consumers there is a light at the end of the tunnel and that the economy is moving to better times, but it will be a gradual process, and confidence may be flat in the next couple of months," Porter said.