The Conference Board Consumer Confidence Index, which had improved slightly in July, plummeted in August. The index now stands at 44.5 (1985=100), down from 59.2 in July. The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index decreased to 51.9 from 74.9 in July.

Consumers’ appraisal of present-day conditions weakened further in August. Consumers claiming business conditions are “bad” increased to 40.6% from 38.7%, while those claiming business conditions are “good” inched up to 13.7% from 13.5%. Consumers’ assessment of employment conditions was more pessimistic than last month. Those claiming jobs are “hard to get” increased to 49.1% from 44.8%, while those stating jobs are “plentiful” declined to 4.7% from 5.1%.

Consumers’ short-term outlook deteriorated sharply in August. Those expecting business conditions to improve over the next six months decreased to 11.8% from 17.9%, while those expecting business conditions to worsen surged to 24.6% from 16.1%.

Consumers were also more pessimistic about the outlook for the job market. Those anticipating more jobs in the months ahead decreased to 11.4% from 16.9%, while those expecting fewer jobs increased to 31.5% from 22.2%. The proportion of consumers anticipating an increase in their incomes declined to 14.3% from 15.9%.

“Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook,” said Lynn Franco, director of The Conference Board Consumer Research Center. “The index is now at its lowest level in more than two years. A contributing factor may have been the debt ceiling discussions, since the decline in confidence was well under way before the S&P downgrade. Consumers’ assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.”

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Co., a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was August 18.