The decline follows a revised November figure, which indicted a decrease from October, rather than the increase reported previously.
The index dropped more than six points from 71.5 in November to 65.1. Previously, November's index was reported as reaching 73.7 from October's 73.1.
The Conference Board's Expectations Index fell sharply in December, dropping from 80.9 to 66.5. The Present Situation Index rose from 57.4 in November to 62.8.
The Conference Board uses 1985 as a base year, assigning the average confidence of 1985 a value of 100, giving the index a reference point.
In December, 17.1 percent of respondents to a survey that involves more than 5,000 households indicated they believed business conditions were "good," a percentage that rose from 14.6 percent in November. Respondents who indicated they believed business conditions were "bad" fell from 31.2 percent to 27.3 percent.
The percentage of respondents indicating jobs were "plentiful," fell from 11 percent to 10.3 percent while those indicating jobs were "hard to get" fell from 37.4 percent to 35.6 percent, the Conference Board said.
"Consumers' expectations retreated sharply in December resulting in a decline in the overall Index. The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," said Lynn Franco, director of the board's Consumer Research Center.
"A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions. While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions."
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