Confidence among U.S. consumers sank in June more than forecast as Americans became distressed over the outlook for jobs and incomes.
Stocks plunged as the confidence data, combined with Conference Board figures showing China’s economic outlook improved less than previously estimated, added to concern the global economy is slowing. Unemployment and the turmoil in financial markets precipitated by the European debt crisis raise the risk that household spending will falter.
“What we need are consistent job gains, not just a month or two,” said Richard DeKaser, chief economist at Woodley Park Research in Washington, whose confidence forecast was the lowest of those surveyed. “Until we get that, I don’t think we’re going to see any gains in consumer confidence.”
The Standard & Poor’s 500 Index dropped below its lowest closing level of the year, and the yield on two-year Treasury notes fell to a record low. The S&P 500 decreased 3 percent to 1,042.53 at 1:35 p.m. in New York. The two-year Treasury note’s yield slid as low as 0.5857 percent.