U.S. consumer confidence weakened in August, falling more than expected to 93.5, the weakest level since last November. This also marked the third consecutive monthly drop.

“Today’s release of consumer confidence abruptly brought the triple-header of very encouraging economic reports seen over the past couple of days to a screeching halt,” says BMO Nesbitt Burns. “The still-jittery tone in the financial markets continues to keep consumers on edge, despite the fact that
the S&P 500 had chalked up five consecutive weekly gains.”

The disappointing report follows directly on the heels of an encouraging report on durable goods orders in the U.S., leading to continued mixed sentiment about the U.S. economy. On the other hand consumers are still buying despite lowered expectations.

“The bad news was the ‘present conditions’ index took a whopping 7.4 point dive to 92.0, the lowest in nearly eight years,” says BMO. The view of the future is also not terribly optimistic as the ‘expectations’ component edged lower for the third month in a row. On the plus side, consumers are still buying. Plans to
buy new homes, appliances and cars were up in the month. ‘Jobs hard to get’ remained steady. And, a majority of businesses expect conditions to improve
over the next six months.”

“The consumer confidence number will add a question mark to the durable goods report,” says RBC Financial. “Two points: one, the durable goods
data indicates actual economic activity while the confidence data may or may not turn into concrete action; and two, consumer confidence should improve rapidly when firms begin to hire once again, or at least stop the layoffs. We expect better news on the hiring front this fall.”

“This report likely reflects the full impact of the summer slide in equities. However, buying intentions are still holding up, and confidence could rebound if markets continue to recover,” says BMO.