While gloom has settled over the stock market and much of the world seems headed into a deep recession, the American consumer remains a picture of positive thinking. If shoppers are worried about economic threats at home or abroad, they're not showing it.

This is welcome news for an economy that depends on consumer spending for about two-thirds of its output. The outlook for exports may be dismal, but recent surveys show that Americans still have a sunny view of their own financial health. Consumer confidence is near a 10-year high.

But it was even higher earlier this year, according to surveys by the Conference Board, which tracks consumer confidence.

The stock market slump, the Clinton scandal, a new wave of terrorism and currency crises abroad all appear to be taking their toll. And as confidence goes, so goes consumer spending especially on big-ticket durables like cars and luxury items. When does the news get so bad that shoppers start worrying and stop shopping?

Economists who track Southern California business activity say the region hasn't reached that point, at least not yet. But they aren't so sanguine about what lies ahead.

In its latest report, for example, UCLA's Anderson Forecast expects a "mild downturn" that could affect consumer spending.

Tom Lieser, executive director of the forecast group, noted that the Conference Board's Pacific Region Consumer Confidence index, seasonally adjusted by UCLA researchers, "was down quite a bit" in the past four months from 139.4 in April to 131.6 last month.

The index measures consumer confidence against a baseline of 100 set in 1985. The 10-year high was 146 in October 1989.

Lieser noted that the Expectations Index, which provides a window into future economic activity, slipped even more than the confidence index in August.

"That may indicate we're in for some weakening," he said.

Jack Kyser, chief economist of the Economic Development Corp. of Los Angeles, keeps track of consumer sentiment by going to a mall every weekend.

"Consumers still seem to be happy," he said. But he added, "This is something you have to watch constantly; it can turn on a dime."

The latest projection from the EDC, done in July, shows a 4.1 percent hike in taxable retail sales this year for Los Angeles County.

"We were a little more cautious about 1999," he said, forecasting a 3.5 percent increase for that year. And his optimism has been waning.

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