Consumer confidence is the basis of the entire economy. Think about this for a second - if you were lost in the woods, and you had a $100 bill in your pocket, what would it be good for? Nothing, except to start a fire perhaps. Money is only worth what we believe it is worth.
When people believe that the economy is good, they invest. Consumers buy things, investors put their money into the stock market where it can be used to grow companies, or into a bank which can then make loans. Then, since people and companies are buying things, more things need to be made; since the banks are loaning, more houses and cars need to be built. This creates a demand for more workers, and that increases consumer confidence, and the cycle goes on, adn the economy grows.
If, on the other hand, people are afraid that they might lose their jobs or take a pay cut, they stop buying things and hang on to their money. Consumer demand then goes down, workers get laid off, and people really do lose jobs. It's a self- fulfilling prophecy.