WASHINGTON -- After displaying resilient confidence over the last few months, consumers are finally starting to show the pangs of the looming "fiscal cliff."
A leading measure of consumer confidence fell sharply to a four-month low this month, suggesting that worries about future tax hikes and government spending cuts are taking a toll on sentiment.
The drop reported Friday in the Thomson Reuters/University of Michigan's consumer mood index -- to 74.5% from 82.7% last month -- tempered the better-than-expected report Friday from the Labor Department. The moderate pace of job gains held up in November despite Hurricane Sandy, and the jobless rate dipped to 7.7% last month from 7.9% in October.
Consumer confidence surveys are more forward-looking. And the latest report showed measures of both current conditions and future expectations falling. Retailers added a big batch of jobs in October and November, and they're banking on solid, though not spectacular, holiday sales. But with the economy driven largely by personal spending, job growth could be hurt if anxious consumers pull back.