The Conference Board reported Tuesday its index of consumer confidence fell 9.1 points to 117.3 in October from a revised 126.4 in September. The index is down 20.9 points from its 29-year high in June.
"Growing anxiety about the financial markets, combined with political concerns and recent layoff announcements, have given consumers the jitters," said Lynn Franco, associate director at the Conference Board, a New York-based private research group.
October's decline was much larger than Wall Street analysts expected.
The report comes amid increasing evidence that the U.S. economy is slowing as a result of the financial crises in Asia and Russia that now are threatening to spread to Latin America.
Federal Reserve policy-makers cut short-term interest rates by a quarter-percentage point twice in the last month in hope of cushioning the U.S. economy from the financial turmoil.
Consumer sentiment is important because consumer spending accounts for two-thirds of the nation's overall economic activity.
In the Conference Board report, consumers said they were most concerned about what's to come in the future, sending the index that measures expectations for the next six months down 10.2 points to 86.6. Fewer Americans said they would buy a home or major appliance or planned a vacation.
More consumers expect business conditions to worsen in the next six months, with fewer jobs and lower paychecks.
Only one of the nation's nine geographic regions, the south-central section of the United States, saw a rise in consumer confidence in October.
Although consumers are worried about future economic conditions, they remain somewhat confident about their current economic situation. The index that measures feelings about present conditions dropped 7.2 points to 163.5 in October, but it still remains at high levels.
The consumer confidence index, started in 1967, is compiled from responses to questions sent to 5,000 households nationwide. The survey polls consumers on matters ranging from job prospects to buying plans. The index compares results to its base year, 1985, when it stood at 100.
Written By Rachel Beck