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FXstreet.com (Barcelona) - As Senate Majority Leader Harry Reid addressed the Senate on its first dat in session after the holiday break, the Conference Board reported that its measure of consumer confidence dropped in December on worries over the so called fiscal cliff note Nomura economists Ellen Zentner, Aichi Amemiya and Roiana Reid.

They note that the sub-indexed of consumer confidence told the story of a recovery that struggle to gain strength amid powerful fiscal policy headwinds. The present situation index increased by 5.4pts in December to the highest level since August 2008, while the expectations index dropped by an alarming 14.4 pts to the lowest level since November 2011.

They feel that the sharp contrast between performance in the sub-indexes owes to more upbeat labour market indicators that are driving household attitudes about their current financial situation, but worries over how, or if, Congress will act to successfully bridge the fiscal cliff are escalating and households are much less comfortable with the prospects for future finances.

While consumer buying plans for cars remained healthy in December, buying plans for homes and appliances fell below their 6-month average. Reports on weekly chain store sales also suggest that late-December buying may have fallen shy of retailers‟ targets. They finish by writing, "As we had presumed, consumer confidence and spending appear to have succumbed to the failure of Congress to act in a timely manner to avoid tax increases and spending cuts scheduled to take effect on 1 January."

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