The Conference Board’s Consumer Confidence Index, which had declined in August, plummeted in September.

The index now stands at 97.6, down from 114 in August. The 16.4-point slide in confidence is the largest monthly drop since October 1990, when it fell by 23 points.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. While survey results conducted before and after the terrorist attacks on September 11 differed slightly, there was no reversal in the downward trend of the index, says the Conference Board.

“The further erosion in confidence continues to be fueled by deteriorating labor market conditions and weakening business conditions,” it said.

Expectations for the next six months were even more pessimistic. The share of consumers anticipating business conditions to worsen increased from 10.7% to 15.0%. Those expecting fewer jobs increased from 17.7% to 21.9%. Consumer income prospects were also less optimistic. Today, only 21.1% expect an increase in their families’ income, down from 23.2% in August.

Lynn Franco, director of The Conference Board’s Consumer Research Center, says, “As the economic ramifications of September 11 continue to reverberate in the coming weeks and months, and the number of layoffs continue to rise, the economy faces tougher times ahead. While consumers have managed to keep the U.S. out of a recession for several years now, that soon may no longer be the case.”

The market has bigger things to worry about though, and it barely reacted when the report was released this morning.