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U.S. consumer confidence rebounds in wake of mid-term elections,
according to RBC CASH Index
NEW YORK, November 17, 2006— With exit polls showing
that the economy was an important factor to voters as they
cast their ballot in last week's mid-term elections, Americans
seem to be more optimistic about the future in the wake of
the shift in control of Congress. According to the most recent
results of the RBC CASH (Consumer Attitudes and Spending by
Household) Index, which measured the attitudes of 1,000 Americans
earlier this week, consumer sentiment gained nearly nine points
this month as the outlook of Americans brightened across the
board. As a result, the RBC CASH Index, released today by
RBC Financial Group, increased to 92.4 this month, compared
to 83.1 in October.
"The post-election rebound in consumer confidence is
supported by economic and financial data," said T.J.
Marta, Economic and Fixed Income Strategist for RBC Capital
Markets. "The S&P 500 has reached record highs, unemployment
is at its lowest rate since 2001, personal income growth has
trended to its highest rate since 2000 and gasoline prices
remain near their lows for the year. Housing does remain an
issue, but the correction is mitigated by mortgage rates,
which are near their lowest level of the year."
The RBC CASH Index is a monthly national survey of consumer
attitudes on the current and future state of local economies,
personal finance situations, savings and confidence to make
large investments. The Index is composed of four sub-indices:
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
nationwide sample of 1,000 U.S. adults polled from November
13 -15, 2006 by survey-based research company Ipsos Public
Affairs. The margin of error was plus or minus 3.1 per cent.
Highlights of the survey results include:
- Americans' economic expectations increased dramatically
this month, bringing the RBC Expectations Index
for November to 60.5, compared to 39.8 last month. This
represents the highest level of confidence in future economic
conditions since January 2005, when expectations stood at
79.6. While expectations for personal finances basically
held steady in November, 34 per cent of Americans believe
their personal finances will be stronger six months from
now compared to 37 per cent last month, overall sentiment
regarding expectations for local economies rose sharply.
This month, 27 per cent of Americans believe their local
economy will be stronger six months from now, compared to
21 per cent who felt similarly in October.
The RBC Current Conditions Index for November
stands at 102.9, increasing slightly after a sharp drop
of 20.5 points last month. November is the fourth month
this year that this index has surpassed 100. Currently one-quarter
(24 per cent) of American consumers rate their local economy
as strong (unchanged from October 2006). Similar proportions
of consumers (27 per cent) rate their current financial
situation as strong.
- Consumer opinions regarding the investment climate also
improved this month. The RBC Investment Index
for November stands at 92.1, up nearly five points from
the 87.2 level observed in October. Just over one-third
(34 per cent) of Americans report they are more comfortable
making a major purchase like a car or home this month, (unchanged
from October 2006). Consumer comfort levels for making other
household purchases also held steady in November. Currently,
39 per cent of American consumers report they are more comfortable
making other household purchases. Other aspects of investing
confidence showed similar resiliency. Consumer opinions
regarding the ability to invest in the future (including
the ability to save for retirement or children's education)
remained steady, with more than four in ten (43 per cent)
Americans reporting they are more confident in their ability
to invest in the future.
- Americans' attitudes regarding stock market and real estate
investments remained unchanged in November 2006. Nearly
four in ten (39 per cent) consumers believe the next month
will be a good time to buy real estate. Attitudes regarding
real estate investment are roughly the same as they were
one year ago (42 per cent said it would be a good time in
November 2005). More than four in ten (44 per cent) American
consumers believe the next month will be a good time to
invest in the stock market, compared to 41 per cent last
month.
- Job security continues to be a bright spot for consumers,
as Americans' confidence regarding job security held steady
in November. The RBC Jobs Index stands at
121.3 this month, compared to 119 in October, as all three
indicators of job security remained steady. Four in ten
(43 per cent) consumers report they are more confident about
current job security than six months ago. Personal job loss
experience remained unchanged, with one-third (32 per cent)
of Americans reporting that they or someone they know personally
have lost their job as the result of economic conditions.
Expectations regarding future job loss also remained low
this month, with only one in five (18 per cent) Americans
reporting future job loss is likely, unchanged from October.
The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html
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Contacts:
Loretta Healy, The Hubbell Group, Inc. (781) 878-8882
Kevin Foster, RBC Capital Markets, (212) 428-6902
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