The Reuters/University of Michigan index of U.S. consumer sentiment unexpectedly declined in early August to 63.2 from 66 in July, MarketWatch reported.

The reading is the lowest since March, and is significantly worse than the 69 that was expected by economists surveyed by MarketWatch. Sentiment has fallen two months in a row.

Consumers are still facing several challenges, including large job losses, weak income growth, falling house prices, rising energy prices and too much debt.

“Until these variables improve measurably, there will not be a consistent improvement in confidence,” wrote Charmaine Buskas, an economist for TD Securities.

“The U.S. consumer will not be much of a help during the early stages of the economic recovery,” added Joshua Shapiro, chief economist for MFR Inc., a global economic consulting company.

Consumers were pessimistic about their current condition and had little expectation that their lot would improve soon.

The index also indicated that fears of inflation have dropped since last month.

In the last two days, federal reports have shown that consumer prices have held steady since June and that retail sales dropped in July after two months of gains. A drop in the unemployment rate for July was accompanied by predictions that more than 10 percent of workers would be out of work by the end of the year.