Turmoil in the financial markets and a distressing labor outlook eroded consumer confidence this month after an unusually upbeat July, according to The Conference Board.

Consumers were particularly pessimistic about the future, which could affect their spending on cars, home improvements and other long-term investments.

The Conference Board, a private research group based in New York, announced on Tuesday that its Consumer Confidence index had fallen to 105.0 from a 111.9 reading in July.

However, the measure outperformed the 104.5 that analysts had forecast and still reflects a healthy overall state of consumer sentiment. The index was based on a reading of 100 in 1985.

The Present Situation component of the index decreased to 130.3 from 138.3 in July, reflecting that consumers were less positive about current conditions, especially in their appraisal of the labor market.

The "expectations" component, which declined to 88.2 from 94.4. showed that they are also less optimistic about business conditions and employment opportunities for the next six months.

Consumer spending comprises two-thirds of the U.S. economy, so the confidence index is a closely watched measure of consumers' likelihood to spend.  The survey is based on a representative sample of 5,000 U.S. households.