NEW YORK (CNNMoney) — Consumer confidence took a dive in December, dragged down by fears that the country will indeed fall over the fiscal cliff.
The closely watched Consumer Confidence Index, which measures the American public’s sentiments every month, sank six points to 65.1. That signals a major turnaround since October, when the index reached a four-year high of 73.1.
The drop in consumer confidence is also the largest since the nation’s credit rating was lowered in August of last year.
The business research firm behind the index, The Conference Board, blamed the continuing failure by the nation’s leaders to reach a deal and avert tax hikes and spending cuts from kicking in automatically next week.
“The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff,” said Lynn Franco, the firm’s director of economic indicators.