Emboldened by falling prices at the gas pump and flush with cash thanks to federal tax rebates, consumer sentiment inched up in early August, according to the Reuters/University of Michigan Index of Consumer Sentiment, released Friday.

The index increased 0.8 percent to 61.7, from 61.2 in July. August’s reading was the second improvement in the index for 2008, with July’s reading being the first month-over-month improvement since January. Friday’s release is off preliminary data. A final report for August will be issued on August 29.

But the news was not all positive. Economists had been projecting an increase in the Consumer Sentiment Index for early August to a reading of 62 or 63, depending on which group of economists was being polled.

The lack of a sizable improvement through the first half of August likely foreshadows worsening economic conditions in the second half of 2008, as the impact of stimulus checks peters out and consumers are forced to rein in their spending, which has been roughly 70 percent of GDP in recent years.

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