NEW YORK — 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 of more than 90 indicates the economy is on solid footing. More than 100 signals strong growth. The index, based on a survey mailed at random to 5,000 households, hasn't come in at more than 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 percent 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.
The confidence report suggests shoppers are clamping down. In fact, Americans saved more money in May even as their paychecks grew.
Many analysts predict the economy's growth will slow in the second half to a subpar 2 percent, from a modest 3 percent in the first half. And an economy that fragile is vulnerable to shocks that could send it into reverse.
"The more evidence that we get that consumers are losing their confidence and growing more tentative about things, the odds of a double-dip recession start to rise a little bit," said Tim Quinlan, an economist at Wells Fargo.
He and other economists still say the chances of a double dip are relatively low, but concern is growing. Europe's debt crisis has spooked Wall Street, taking a bite out of Americans' stock portfolios. And unemployment is still stuck at nearly 10 percent.