Doubts over the jobs market and perhaps the rise underway in interest rates pulled down the consumer confidence index in August, to 106.1 which is nearly 8 points below July's downward revised 114.0 and the lowest reading since January this year. The reading is more than 10 points below Econoday's consensus and nearly 7 points below the lowest estimate.

Those saying jobs are currently hard to get jumped nearly 3 percentage points to 14.1 percent with those saying jobs are plentiful fell nearly 4 points to 40.3 percent. These results are not positive indications for Friday's employment report. The assessment of the jobs market six-months out is mixed but does include a 2.4 percentage point rise to 18.0 percent in those who expect employment to fall while, in related readings, more see their income falling over the next six months and fewer see an increase.

Despite the negatives, buying plans held steady and despite what the report describes as renewed concerns over high food and gas prices, data on inflation expectations show only a very marginal rise.

One telling reading, however, is a jump in those who see higher interest rates 12 months out, up nearly 5 percentage points to 64.2 percent in a month that saw an historic jump in mortgage rates. Confidence in the stock market eased but only slightly with bulls still out in front of bears by 34.4 to 30.5 percent.

Following this report together with a sizable fall in job openings in the JOLTS report (data also released at 10:00 ET) Econoday's Consensus Divergence Index stands at minus 11 for the first negative score in two weeks to indicate that recent US data on net are coming in slightly below expectations.

The consumer confidence index is expected to hold roughly steady in August, at a consensus 116.5 versus July's 117.0. This report has exceeded not only the consensus in the last three reports but the consensus range as well.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.