Consumer confidence hits lowest level in four months, cools retail spending

Consumer confidence hits lowest level in four months, cools retail spending

EDUARDO MUNOZ/REUTERS

The 2012 holiday season may have been the worst for retailers since the financial crisis, with sales growth far below expectations.

Consumers grew grumpier this month as the ongoing fiscal wrangling in Washington tried their patience and frayed their nerves, a report showed on Thursday.

The Conference Board’s consumer confidence index hit its lowest level in four months in December. It dropped to 65.1 from 71.5 in November.

The confidence report arrived amid an otherwise upbeat batch of data showing first-time jobless claims fell and new home sales climbed.

Still, cliff jitters sent stocks lower, pushing the S&P 500 down for a fourth straight day.

“Consumers think the future looks pretty dire given the lack of progress in the fiscal cliff negotiations and the likely impact on their pocketbooks,” Bricklin Dwyer, an economist at BNP Paribas, told the Daily News.

Americans are also worried about the toll the $ 600 billion worth of automatic tax hikes and spending cuts could take on the broader economy, Dwyer said.

“We just got out of a recession. Now we’re going to put ourselves back in one?”

Those fears have helped cool both business and personal spending. Early reports on the holiday shopping season have shown less than stellar results. U.S. retail sales were down 2.5% last week from a year earlier, according to ShopperTrak, which recently trimmed its holiday sales forecast to a gain of 2.5%.

Consumer spending is key as it drives more than two-thirds of U.S. economic growth.

Data from the Labor Department showed unemployment benefit claims fell by 12,000 to 350,000 last week.

Separate numbers from the Commerce Department showed new home sales climbed 4.4% last month to a 377,000-unit annual rate â€" a pace not seen since April 2010.

With News Wire Services

elazarowitz@nydailynews.com