This is real bad,  consumer spendings account for 2/3 of the GDP.  A fall in confidence does not augurs well for the economy.  Tightening of the wallet/purse can sometimes self lead to a recession.   When consumers stop spending, though your economy is in fact in a good shape it would be a self fulfilled prophecy.  But in this case , I won’t say that it is self fulfilled, USA is indeed in a recession.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGLba6r_uowk&refer=home

May 27 (Bloomberg) — Confidence among American consumers fell in May to the lowest level since 1992 as the two-year housing slump showed no sign of bottoming.

The Conference Board’s confidence index declined more than forecast to 57.2, the New York-based research group said today. The S&P/Case-Shiller home-price index dropped 14.4 percent in March from a year earlier, the most since the figures were first published in 2001. Separate figures from the Commerce Department showed sales of new homes were the second-lowest since 1991 in April.

I feel somehow that the worse is yet to unravel, this is really only the beginning of a recession which is unlike previous recession it is as the Oracle of Omaha said long and deep recession.