By Anne D'Innocenzio & Jeannine Aversa, AP Business Writers
NEW YORK (AP) — Stung by falling stocks and sick of waiting for jobs to come back, Americans are in a sour mood about the economy. And it's getting worse fast.
Consumer confidence fell dramatically last month, adding to the evidence that the nation is in no mood to spend its way back to growth and raising fears of a double-dip recession.
Businesses have been cautiously building up inventories to prepare for increasing demand as the economy improves. The darkening mood leaves them with a question: Who's going to buy all the cars, dishwashers and clothes heading to stores and showrooms?
"We need the consumer to spend, and right now declining confidence is not the prescription for a stronger economy," said Joel Naroff, president of Naroff Economic Advisors. "This was a bad report, no matter how you slice it."
The Consumer Confidence Index came in at 52.9 in June, a jarring decline from 62.7 in May, according to a survey released Tuesday by the Conference Board, a private research group. It was the biggest drop since February.Generally, a reading above 90 indicates the economy is on solid footing. Above 100 signals strong growth. The index, based on a survey mailed at random to 5,000 households, hasn't come in above 90 since the recession began in December 2007.
Economists watch the number closely because consumer spending, which includes not just merchandise but expenses like health care, accounts for about 70% of U.S. economic activity and is critical to a strong recovery.
The confidence report rattled Wall Street. The Dow Jones industrial average closed down nearly 270 points, falling below 10,000 for the first time since June 10.