Economists on Wall Street were expecting confidence to inch up to 86 during the month.

The private research group said its index measuring consumer confidence, which uses 1985 as a base of 100, fell 4.6 points to 80.3 from a revised 84.9 in November but up from its 9-year low of 79.6 in October. The board had originally reported confidence as 84.1 during November.

Consumer confidence hit an all-time high of 144.7 in May 2001.

The survey of consumer attitudes concerning both the present situation as well as expectations regarding economic conditions is directly related to the strength of consumer spending.

Strong economic growth translates into healthy corporate profits and higher stock prices. The bond market focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and inflationary growth, which is what happened through much of the nineties. As a result, investors in the stock and bond markets have enjoyed huge gains.

Consumer spending accounts for two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy.

The board said the survey, which is based on a representative sample of 5,000 U.S. households, showed its present situation index dropped to 69.9 from 78.3 while its expectations index fell to 87.2 from 89.3 a month earlier.

Lynn Franco, director of The Conference Board's Consumer Research Center, said, "Latest signals from consumers are in keeping with a continuing mixed bag of economic news.

"But the major factor dampening consumers' spirits has been the rising unemployment rate and the discouraging job outlook. Weak retail sales over the holidays clearly reflect the current mood of consumers. Until there is an improvement in labor market conditions, there is not likely to be a significant upturn in consumer confidence," Franco said.

The board said consumers' assessment of current conditions was more dour in December than in November.

Those rating current business conditions as good declined to 14.6 percent from 16.1 percent. Those holding the opposite view remained unchanged at 25.8 percent.

The report also showed consumers reporting that jobs are hard to get rose to 29.8 percent from 27.3 percent in November. Those claiming jobs were plentiful fell to 12.4 percent from 14.2 percent a month earlier.

Consumers expecting business conditions to improve in the next six months edged up slightly to 20.8 percent from 20.3 percent. But the percentage of consumers expecting conditions to become worse fell slightly to 11.0 percent from 11.3 percent.

The employment outlook is also less favorable. Consumers expecting fewer jobs in the coming months rose to 20.2 percent from 18.8 percent. Those anticipating more jobs slipped to 15.1 percent from 15.4 percent.

The report also showed income expectations were also less optimistic. Currently, 18.7 percent of the consumers polled anticipate an increase in their incomes, down from 19.4 percent in November.