Confidence plummeted in August, but the economy mostly moved sideways after a slightly better July

The U.S. may not be in a double dip yet, but Americans sure think it is. Although August was another extremely weak month for the recovery, the big drop in consumer and business sentiment didn't match the economy's essentially sideways movement during the month. While the picture looked pretty gloomy in August, it still appeared better than in June.

Let's begin by looking at some of the most important numbers. Here's a chart that I create each month with 15 major indicators. For each I color code the metric's verdict and the trend's direction (click to enlarge):

Rather than consider each of these four groups individually, it might be more useful look at the overall balance of good and bad.

August vs. July

Looking at direction alone, August definitely appears worse than July. In August, just five indicators improved, while eight got better in July. For "change of direction," the results were even uglier: a mere three trends showed optimistic results in August, while twice as many were more promising in July.

But this should be taken in context. July happened to be a relatively good month. The economy had been clearly worsening from April through June. It appeared to reverse course somewhat in July, as spending rose and confidence ticked up. So some of the relatively worse results you see in August were still better than in June.