These numbers confirm the notion that consumer spending, which has been so resilient, is under some threat. With investor sentiment so weak and the labor market continuing to deteriorate, consumer confidence had only one way to go -- lower.

Weaker consumer confidence threatens to reverse the course of the recovery. That's why policy makers will be so cautious. They don't really have to worry about the economy's fundamentals, but they do have to worry about confidence.

This confidence is encouraging and takes some of the pressure off the terrible number we saw with retail sales.

Consumer confidence warned us already that this would be mild recession,