Business

US consumers lose confidence as fiscal cliff nears

WASHINGTON — US consumers peering over the ‘‘fiscal cliff’’ don’t like what they see. The Conference Board said Thursday that its consumer confidence index fell for the second straight month, to 65.1, down from 71.5 in November.

The survey showed consumers’ outlook for the next six months deteriorated to its lowest since 2011 — a signal to Lynn Franco, the board’s director of economic indicators, that consumers are worried about tax hikes and spending cuts that take effect Jan. 1 if the White House and Congress can’t reach a budget deal.

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The December drop in confidence ‘‘is obvious confirmation that a sudden and serious deterioration in hopes for the future took place in December — presumably reflecting concern about imminent ‘fiscal cliff’ tax increases,’’ said Pierre Ellis, an economist with Decision Economics.

The decline comes as the economy shows signs of improvement elsewhere. A recovery in housing market is looking more sustainable. On Thursday, the government said new-home sales increased in November at the fastest seasonally adjusted annual pace in 2½ years. And the job market has made slow but steady gains in recent months.

But the political wrangling threatens the economy’s slow, steady progress. President Obama and House leaders returned to Washington Thursday to resume talks with just days to go before the deadline.

A short fall over the cliff won’t push the economy into recession. But most economists expect some tax increases to take effect next year. That could slow economic growth.

While consumers are more worried about where the economy is headed, they were upbeat about current conditions, according to the latest survey. Their assessment of current economic conditions rose this month to the highest level since August 2008.

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A key reason for that is gas prices hit a 2012 low of $3.21 a gallon last week.

Associated Press

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