The Conference Board, a private research firm said their consumer confidence index tumbled from 45 in November to 38 in December as the US economy worsened.
For the first half of 2009 the outlook is "quite dismal", and consumeres see "only a modest recovery'' in the second half of the year, said Lynn Franco, research director at the Conference Board.
"The further erosion of the consumer confidence index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008,'' Ms Franco said.
The US economy was officially declared in recession on December 1, in a quarter marked by a worsening financial crisis, massive government spending to save banks, rising unemployment and falling home values.
The Conference Board report was based on a survey of 5000 US households, and showed consumers' confidence in current business conditions had plummeted.
Consumer confidence levels are "now close to levels last seen in the months following the 1990-91 recession,'' Ms Franco said.
US consumers are also increasingly worried about rising unemployment, which is at its highest rate in 15 years of 6.7 per cent.
42 per cent of people surveyed said jobs were "hard to get" while just 6 per cent said jobs were "plentiful".
46 per cent said business conditions were "bad", and 33 per cent expected business conditions to deteriorate in 2009.
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