Consumer confidence increased more than expected in August, pulled up by expectations of future economic activity, according to The Conference Board.

Meanwhile, back-to-school sales and tax-free holidays helped boost August's retail sales, which means merchants and industry watchers must wait for September sales to get a truer picture of whether the economy is rebounding, CNBC reported.

The Conference Board, a private research group, said its index of consumer confidence rose to 53.5 in August from a 51 in July, Dow Jones Newswires reported. A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth.

"Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future," said Lynn Franco, director of the New York-based Conference Board's consumer research center.

Retail sales rose rose 0.4% in August--the highest amount in five months, the Commerce Department said. It was the second straight monthly increase and the biggest gain since March, the Associated Press (AP) reported.

Excluding a decline in autos, retail sales increased 0.6%, which followed two relatively flat months and a sharp drop in May. The strength in last month's sales came in a number of areas from department stores to clothing stores and sporting goods outlets, the AP reported.

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