U.S. consumer confidence fell to its lowest level in four months in August on worries over high unemployment and dismal personal finances, though the mood improved from earlier this month, a survey showed on Friday.

The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for August fell to 65.7 from 66.0 in July.

That was the lowest since 65.1 in April but above economists' expectations for 64.5 and higher than this month's preliminary reading of 63.2.

This tells me consumers are still in rebuilding phase, said Christopher Low, chief economist at FTN Financial in New York.

Investors still have to be worried about the sustainability of the recovery. It's clear to me that we cannot count on growth through next year as long as consumers are still on the ropes.

U.S. stocks hit session lows <.SPX> after the data, while the dollar slipped versus the yen.

U.S. government bonds, which are favored by investors during times of economic weakness, trimmed earlier losses.

Consumers rated the current economic conditions as the worst since March, when the stock market hit 12-year lows. The index fell to 66.6 from 70.5 in July, but was an improvement from 64.9 earlier this month.

Confidence rebounded in late August as consumers increasingly expected improved conditions in the national economy even as they reported the worst assessments of their finances since the surveys began in 1946, the report said.

Consumers' one-year inflation expectations fell to 2.8 percent -- the lowest since May -- from July's 2.9 percent. Five-year inflation expectations dropped to 2.8 percent from July's 3.0 percent, reaching their lowest point since April.

(Additional Reporting by Richard Leong; editing by Jeffrey Benkoe)

Inflation