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Consumer confidence holds steady heading into second quarter,
according to RBC CASH Index
NEW YORK, April 7, 2006 — Consumer confidence
has stabilized after taking a deep dive in March 2006, according
to the most recent results of the RBC CASH (Consumer Attitudes
and Spending by Household) Index, which measured the attitudes
of 1,003 Americans this week. Consumer's lower confidence
levels regarding investing and current economic conditions
were offset by an increase in their expectations for the future
and continued optimism regarding job security. As a result,
the RBC CASH Index for April, released today by RBC Financial
Group, stands at 89.4, compared to 86.2 in March.
"Although the first quarter was a bumpy ride and people
are still skittish about current conditions, their expectations
for the future are more positive," said Vincent Boberski,
director of Fixed Income Research for RBC Dain Rauscher. "Consumers
also are feeling more secure in their jobs, which traditionally
is a strong indicator of their overall confidence in the economy.
"While we expect consumer optimism to continue edging
up through the spring, we remain cautious about the long term
as we continue to expect a slowdown in the second half of
the year," added Boberski.
The RBC CASH Index is a monthly national survey of consumer
attitudes on the current and future state of local economies,
personal financial situations, savings, and confidence to
make large investments. The Index is comprised of four sub-indexes:
RBC Current Conditions Index; RBC Expectations Index; RBC
Investment Index; and, RBC Jobs Index. The Index is benchmarked
to a baseline of 100 assigned at its introduction in January
2002. This month's findings are based on a representative
sample of 1,003 adults polled nationwide between April 3-5,
2006, by survey-based research company Ipsos Public Affairs.
Highlights of the survey results include:
- Job security attitudes edged up. The RBC Jobs Index
for April 2006 stands at 124.5, up six points from the 118.5
in March 2006, reaching a 12-month high. This month, 42
per cent of Americans report they are more confident about
their job security than they were six months ago (compared
to 41 per cent who were more confident in March 2006).
- Direct job loss experience also declined in April 2006.
Fewer than one-third (30 per cent) of Americans report that
they or someone they know personally has lost their job
as a result of economic conditions in the past six months
(compared to 34 per cent in March 2006).
- Although opinions regarding the ability to invest in the
future remain stable, the overall investment climate has
cooled, contributing to a decline in consumer confidence.
The RBC Investment Index declined for the
second straight month, dropping to 86.7, down from a 16-month
high of 101.5 in February 2006 and 98.6 in March 2006. People
who feel confident in their ability to invest in the future
crept up to 44 per cent, from 43 per cent in March 2006.
- However, with the recent rise in interest rates, Americans
are more cautious regarding purchases. Nearly half (46 per
cent) of consumers report they are less confident in making
a major purchase such as a home or car, and only four in
ten (38 per cent) state they are more comfortable making
other household purchases (compared to 45 per cent who were
more comfortable making other household purchases in March
2006).
- The RBC Expectations Index stands at 56.9,
rebounding dramatically in April, recovering most of the
nearly 20-point drop experienced in March 2006. Expectations
regarding personal financial situations remained constant,
with four in ten (38 per cent) believing their own personal
finances will be stronger in six months, the same level
of confidence expressed last month. In addition, the number
of Americans who believe they or someone they know will
be at risk of losing their job due to economic conditions
in the next six months held steady, with only 16 per cent
believing such job loss is likely. The combination of these
factors contributed to a significant increase in the
RBC Expectations Index in April 2006.
- The RBC Current Conditions Index dropped
nearly six points to 98.0, down from 103.9 last month. Opinions
about the current state of the local economy are evenly
split, with one in five Americans (21 per cent) rating their
local economy as strong and a similar number (23 per cent)
rating their local economy as weak. The percentage of Americans
rating their current personal financial situations as weak
increased to 27 per cent from 23 per cent last month, contributing
to the overall decline in the RBC Current Conditions
Index.
- The entire RBC CASH Index report can be viewed at www.rbc.com/newsroom/rbc-cash-index.html.
About RBC Financial Group
Royal Bank of Canada (TSX, NYSE: RY) uses the initials RBC
as a prefix for its businesses and operating subsidiaries,
which operate under the master brand name of RBC Financial
Group. Royal Bank of Canada is Canada's largest bank as measured
by market capitalization and assets and is one of North America's
leading diversified financial services companies. In the United
States, RBC provides personal and commercial banking, insurance,
full-service brokerage and corporate and investment banking
services to about 1.5 million clients through RBC Centura,
RBC Insurance, RBC Liberty Insurance, RBC Dain Rauscher and
RBC Capital Markets. The company employs approximately 70,000
full and part-time employees who serve more than 14 million
personal, business and public sector clients through offices
in North America and some 30 countries around the world. For
more information, please visit www.rbc.com.
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Contact :
Vince Boberski, RBC Dain Rauscher, (312) 559-1654
Kevin Foster, RBC Capital Markets, (212) 428-6902
Susan Austin, The Hubbell Group, Inc. (781) 210-5020
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