This really isn't good news as any drop in consumer confidence will slow the recovery. I think Rich Baehr has nailed it; people are fearful of what the Obama administration will try and change next, as well as worrying about out of control spending and higher taxes on the horizon.

Businesses, too, are worried for the same reason. In fact, this is the first recovery in my memory where the economy doesn't appear ready to roar back. Even the recession of 2001-2002 featured very strong growth in the quarters coming out of the downturn. It appears that growth coming out of this recession will be quite anemic and unless consumer sentiment rebounds, the retail sector will continue to see slow growth and few job opportunities.

Rex Nutting of Market Watch has the bad news. He writes "The U.S. consumer sentiment index unexpectedly declined in early August to 63.2 from 66.0 in July, according to media reports on Friday of the Reuters/University of Michigan index. It is the lowest reading since March, and is significantly worse than the 69.0 reading expected by economists surveyed by MarketWatch."

Hard to imagine that things could get much worse. But they can, and probably will once the recovery start and the bloated money supply causes inflation to begin to rise.

High unemployment, slow growth, and rising inflation - but don't worry. The White House will spin that as a success.