U.S. consumer confidence tumbled in December, driven lower by fears of sharp tax increases and government spending cuts set to take effect next week.

The Conference Board said Thursday that its consumer confidence index fell this month to 65.1, down from 71.5 in November. That's second straight decline and the lowest level since August.

"Its the fiscal cliff fear, it also might be a delayed reaction to Superstorm Sandy, especially in New Jersey," said spokesman Ken Goldstein.

The survey showed consumers are slightly more optimistic about current business conditions and hiring. But their outlook for the next six months deteriorated to its lowest level since 2011, the survey showed.

"What has happened here is that some of that optimism that developed in September and October waned a little bit in November and December. Now, whether its the storm or the fiscal cliff showdown, it has fallen, and this is consistent with what we are finding from the different stores and malls. The holiday season started out with a bang but really ended with a whimper," Goldstein added.

Lynn Franco, the board's director of economic indicators, said the decline in expectations for the next six months is a signal that consumers are worried about the "fiscal cliff." That's the name for the automatic spending cuts and tax hikes that take effect Jan. 1 if the White House and Congress can't reach a budget deal.

Negotiations between President Barack Obama and House Republican leaders on a package to avert the sharp tax increases and spending cuts reached an impasse last week. Obama and congressional lawmakers return to Washington today to resume talks with just days to go before economy goes over the fiscal cliff.


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