The struggling economy, tighter credit, high energy prices and the calamity in the real estate market are just part of the bleak picture as the year-end holidays approach.

Consumers are expected to be cautious in their holiday spending plans; gifts and toys are under close scrutiny because of numerous safety recalls, which may also lead to shortages of popular children's items, say analysts.

Not surprisingly, US consumer confidence has slumped to a two-year low amid weakening business and job-market conditions, a Conference Board survey showed.

The business research company said its consumer confidence index fell to 99.8, down from a revised 105.6 in August.

The outlook is troubling at the approach of the Christmas season, when consumer spending -- about two-thirds of US economic activity -- is the greatest.

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To make matters worse, oil prices are near record highs around 80 dollars a barrel, and home heating costs are surging: one survey showed hesting oil up 28 percent from last year and natural gas up 10.5 percent.

"With lower home prices, lower home equity withdrawal, a credit crunch in mortgage and consumer credit markets, high oil and gasoline prices, falling employment, lower consumer confidence, the saving-less and debt-burdened US consumer -- that spent well above its means for years -- is now on the ropes," says Nouriel Roubini, a New York University economist who has been predicting a bleak economic outlook for the past year.

"And if consumers retrench, a recession becomed a sure outcome."