The index dropped sharply from an upwardly-revised 128.6 in December. The Federal Reserve is expected to cut interest rates on Wednesday by a half-point for the second time this month.
Consumer spending accounts for two-thirds of U.S. economic activity.
The Conference Board noted, however, that consumers' views on current conditions had not yet deteriorated to a point that suggested outright recession, echoing comments from Greenspan in testimony last week. The firm said its present situation index dropped to 170.5 from a revised 176.1 in December. The news gave a slight lift to the U.S. Treasury market, dented the dollar against the euro, but had little effect on stocks. A second leading gauge of consumer sentiment issued by the University of Michigan earlier this month showed that the attitudes of consumers deteriorated to their worst level in four and a half years. The two-month fall in the Michigan index was the third largest on record and recalled similar steep declines that preceded the U.S. economic recessions of the early 1990s and 1980s.