The University of Michigan Index of Consumer Sentiment for August was revised markedly in the final report issued this morning. Forecasters, already surprised by a decrease of 3.8 points in the preliminary figure, expected that level of 92.7 to hold for the month's final. But it came at 89.1, down 3.6 points more for a total drop in the month of 7.4 points. Normally there is little change from the preliminary to the final readings for a given month.

The index of current conditions was adjusted downward 2.2 points from the preliminary to put the entire month at 108.2, off 5.3 points from July. The index of consumer expectations came down another 4.4 points to 76.9, down 8.6 points from July.

The indexes are lower from July for both income brackets, below $50,000 and above $50,000, all four major Census regions of the country and all age groups.

Two weeks ago in this space, Tom Moeller graphed the total index with the price of crude oil. The energy price situation has worsened noticeably since then, and we'd surmise, without much esoteric econometric analysis, that people are reacting negatively to the resulting record gasoline prices. A summary of those developments is contained in a separate story following.

The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.