Washington - Consumer confidence in the United States hit a record low in December as employers continue to shed jobs and amid a gloomy outlook for the next year.

The Conference Board's measure of consumer confidence fell to 38 in December from the downwardly revised 44.7 in November as the world's largest economy grapples with a recession and the worst economic conditions in decades.

"The overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half," Franco added. The consumer confidence index samples 5,000 US households.

Emergency steps by the US government have failed to halt the slide that began with defaults on home mortgages that prompted the near collapse of the financial sector and sent the economy spiralling.

The US Treasury Department has set up a 700-billion-dollar bailout package for financial institutions and has also taken steps to help the automotive industry.

The Treasury Department announced Monday night that it would commit 6 billion dollars to supporting GMAC LLC, the financing arm of General Motors Corp, to save the ailing car giant from bankruptcy.

The Treasury will buy a 5-billion-dollar stake in GMAC and also lend GM an additional 1 billion dollars so that the largest US carmaker can contribute to the financier's reorganization as a bank holding company.

Last week, the Federal Reserve approved GMAC's application to become a bank holding company, giving it greater access to federal funding. GM owns 49 per cent of GMAC, which is a critical source of financing for car sales.

The funding is in addition to the 13.4-billion-dollar emergency loan endorsed by President George W Bush earlier this month to keep the iconic US car industry alive and avoid an even deeper economic recession in the country.

The 13.4-billion-dollar loan provides GM with 9.4 billion dollars and Chrysler LLC with 4 billion dollars over December and January. GM could get another 4 billion dollars in February.

Car sales have plunged some 40 per cent in the past few months as consumers struggled to get loans in the current financial crisis, adding to the woes of an industry that has already been struggling to keep up with more fuel-efficient and cheaper foreign competitors.

GM's sales dropped 22 per cent this year and GMAC has run desperately low on cash, allowing for only limited loans to buyers with the best credit.

The financial crisis has hampered the flow of credit and forced businesses to lay off hundreds of thousands of workers. The number of Americans applying for for unemployments benefits hit a 25-year high in December. Almost 2 million jobs were lost in 2008. (dpa)