| |
Consumer confidence dips to six-month low, according to
RBC CASH Index
NEW YORK, April 6, 2007 — Americans' economic
enthusiasm continued to erode, hitting a six-month low heading
into the second quarter, according to the most recent results
of the RBC CASH (Consumer Attitudes and Spending by Household)
Index. The survey, which measured the attitudes of 1,000 Americans
earlier this week, found that overall consumer sentiment decreased
by nearly seven points in April, driven by declines in all
facets of consumer attitudes. As a result, the RBC CASH Index,
released today by RBC, stands at 85.4, compared to 92.3 in
March.
"The decline in consumer confidence to its lowest level
since October is consistent with the increasing price of gasoline,
rising mortgage rates and continuing headlines about the housing
correction," said T. J. Marta, Economic and Fixed Income
Strategist for RBC Capital Markets. "Overall, the across-the-board
downturn may indicate further erosion of economic confidence
in coming months, especially if gas prices continue to increase."
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 April 2-4,
2007, 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:
- Negative views of the current state of the economy continue
to outweigh positive views, with more than one-quarter of
Americans (27 per cent) rating their local economy as weak,
and slightly more than one-fifth (22 per cent) rating their
local economy as strong. The RBC Current Conditions
Index dropped to 99.0 in April from 107.5 last month.
- Consumers' confidence in the future weakened again this
month as the RBC Expectations Index decreased
nearly eight points to 41.7, down from 49.3 in March. While
nearly one in four consumers (23 per cent) continue to believe
their local economy will be stronger six months from now
(compared to 24 per cent in March), perceptions that the
local economy will be weaker in six months increased an
additional two points this month to 19 per cent, which is
nearly double the response (11 per cent) in February.
- Americans' attitudes toward making major purchases (such
as a home or car) also waned again in April as half of respondents
(48 per cent) report they are currently less comfortable
making a major purchase than they were six months ago, compared
to 44 per cent last month.
- Although consumers' views of both the current economy
and their future prospects are darkening, their overall
opinions regarding investing basically held steady this
month. The RBC Investment Index stands at
92.3, down from 96.4 in March, as consumers who reported
a "weak" rating of their personal financial situation
increased two points, to 26 per cent, and those who reported
greater confidence in their ability to save and invest in
the future dipped one point, to 41 per cent.
- Despite a slight overall decline, Americans' confidence
regarding job security remained the strongest facet of consumer
sentiment this month. The RBC Jobs Index for
April stands at 126.4, compared to 128.4 in March. Confidence
about personal job security slipped somewhat, with 39 per
cent of Americans saying they are less confident about job
security than they were six months ago (versus 35 per cent
in March).
The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.
- 30 -
Contacts:
Loretta Healy, The Hubbell Group, Inc., (781) 878-8882
Kevin Foster, RBC Capital Markets, (212) 428-6902
|
|
