Consumer confidence in the US slumped in December, adding further gloom to the outlook for the US economy.

The Consumer Confidence Index dived to 80.3 in December from a revised 84.9 in November, according to data from an influential business lobby group, the Conference Board.

The figure was in stark contrast to analysts' forecasts of a slight rise to 85.5, and was the sixth fall in the past seven months.

"The major factor dampening consumers' spirits has been the rising unemployment rate and the discouraging job outlook," said a Conference Board spokeswoman.

The data reinforces fears that consumer spending, which makes up two-thirds of the US economy, is unlikely to fuel an economic recovery any time soon.

The US economic outlook weakened after unemployment jumped to an eight year high. Continuing talk of a war in Iraq and rising tensions with North Korea have also unsettled the population.

Chain store massacre

On Monday, US chain stores reported that sales grew only slightly in December, with a last-minute rush around Christmas failing to make up for an otherwise poor month.

There was a 0.7% rise in the four weeks ending 28 December compared with the same period in November, Instinet Research said in its weekly Redbook report.

"The last-minute Christmas rush was not enough to make up for the pre-Christmas slump," the report said.

On Monday, discount retailer Target said sales last week at stores open at least a year were well above expectations but had not made up for a disappointing month.

Wal-Mart revised its December sales figures down to a rise of between 2-3% from 5%.