Economy souring consumer confidence

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 in May, adding to evidence that the nation is unwilling 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. Economists watch the number because consumer spending, which includes expenses such as health care, accounts for about 70 percent of U.S. economic activity.

President Barack Obama expressed confidence Tuesday that the recovery will stay on track, but he acknowledged the economy faces threats.- AP