NEW YORK (AP) – Consumers’ renewed worries about job prospects led to a bigger-than-expected drop in confidence in August and provided more evidence of the fragility of the economic expansion.

The Consumer Confidence Index, which had been rising since April, dropped to 98.2 from a revised reading of 105.7 in July, according to a report Tuesday from The Conference Board, a private research group.

The reading was well below the 103.5 that analysts expected, and was the lowest since May, when it registered 93.1.

“The slowdown in job growth has curbed consumers’ confidence,” said Lynn Franco, director of The Conference Board’s Consumer Research Center.

Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.

The report of the surprising large decline in consumer confidence came a day after the Commerce Department said consumers spent more freely in July, raising hopes that June’s economic pause would only be temporary.

The government disclosed at the same time, however, that personal incomes grew slower than analysts expected in July.

But some economists were not deeply concerned about the dip in confidence.

Mark Vitner, an economist at Wachovia Securities, sees the latest snapshot of consumer sentiment as only a “bump in the road” and expects the index will rebound in September.

“Consumers still sense that the recovery is on track, and they are expressing their concerns on the lack of job growth,” he added.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, believes that when taking the numbers in context with the big rise in consumer confidence levels in June and July, “they’re not as bad as they might appear.” Consumer confidence jumped to 102.8 in June from 93.1 in May.

The consumer confidence report – whose cutoff date for preliminary results was Aug. 24 – captures the period when oil prices surged, briefly topping $49 per barrel, before falling dramatically at the end of the month.

However, Franco said she hasn’t seen the surge in oil prices taking a “bite out of confidence” in surveys with consumers. Rather, she said, consumers’ overall job outlook is what’s hurting confidence because “it is a source of spending and income.”

On Wall Street, a late-session buying spree gave stocks a moderate lift as investors managed to shrug off the disappointing confidence report as well as on manufacturing.

The Dow Jones industrial average was up 51.40 to close at 10,173.92. The Standard & Poor’s 500 index gained 5.09 to 1,104.24, while the Nasdaq composite index was up 1.61 at 1,838.10.

Meanwhile, the International Council of Shopping Centers cut its August retail sales forecast on Tuesday to a range of 1.5 percent to 2 percent from the original forecast of 3.5 percent. A number of factors helped dampen sales, including Hurricane Charley, a late Labor Day weekend, higher gasoline prices and a lack of child tax-rebate checks, which boosted business in the year-ago period.

“There’s been too much noise in August to tell whether there is a real pullback from consumers or whether it is because of all these factors,” said Niemira.

The nation’s stores report their monthly sales on Thursday.

Economists are also anxiously awaiting August job figures from the Labor Department, due out Friday. Analysts are expecting the nation’s nonfarm payrolls to add 150,000 jobs. Job growth slowed dramatically in July – a meager 32,000 jobs were added, the slowest pace since December.

The consumer confidence report said the Present Situation index fell to 100.7 from 106.4, while the Expectations Index, which measures consumers’ outlook over the next six months, dropped to 96.6 from 105.3.

Consumers’ assessment of current conditions was less upbeat than last month. Those saying business conditions are “good” declined to 23.2 percent from 25.2 percent. Those claiming conditions are “bad” rose to 20.1 percent from 19.1 percent. Consumers saying jobs are “plentiful” decreased to 18.1 percent from 19.7 percent while those claiming jobs are “hard to get” rose to 25.8 percent from 25.7 percent in July.

Consumers have also reduced expectations for the next six months. Those anticipating conditions to worsen increased to 8.8 percent from 7.1 percent. Those expecting business conditions to improve declined to 20.1 percent from 23.0 percent last month.

The employment outlook for the next six months was also less favorable. Consumers expecting fewer jobs increased to 15.4 percent from 13.5 percent. Those anticipating more jobs to become available fell to 16.2 percent from 19.5 percent.

But consumers expecting their incomes to improve in the months ahead rose to 19.3 percent from 18.0 percent last month.