| |
Consumer sentiment stabilizes after three months of declining
confidence, according to RBC CASH Index
NEW YORK, May 11, 2007 — Americans' economic
enthusiasm climbed slightly this month, stabilizing after
three months of declining confidence, 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 respondents much
more positive about current conditions but less optimistic
about their future prospects. As a result of these mixed attitudes,
the RBC CASH Index, released today by RBC, stands at 87.1
for May, slightly above April's 85.4 level.
"Consumers remain relatively positive about their current
conditions, likely due to the rising stock market and income
gains," said T. J. Marta, Economic and Fixed Income Strategist
for RBC Capital Markets. "However, their longer-term
outlook has weakened, probably because of fears related to
rising gasoline prices, the sagging housing market and a softening
in perceptions about the jobs outlook."
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 May 7-9,
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:
- Americans' ratings of their current personal finances
strengthened in May, with nearly a third (31 per cent) of
consumers saying their personal finances are strong, up
from 26 per cent in April. In addition, consumers indicated
greater comfort with making major purchases. The combination
of these more positive attitudes caused the RBC Current
Conditions Index to jump to 113.2 in May from 99.0
last month.
- Although consumers feel much more positively about the
present, their confidence in the future weakened again this
month as a fifth (21 per cent) of survey respondents expected
their local economy to be weaker in six months, compared
to about the same number (20 per cent) who believe it will
be stronger. This is the first time since August 2006 that
the share of respondents believing the economy will weaken
exceeded the number expecting it to strengthen. The softening
of opinions regarding future conditions produced a significant
decline in the RBC Expectations Index, which
decreased 17 points to 24.3, down from 41.7 in April, the
fourth consecutive month of declining confidence in the
future.
- Although consumers' expectations of their future economic
prospects are darkening, their overall opinions regarding
investing improved significantly this month. The RBC
Investment Index stands at 107.5, up 15 points from
April's level of 92.3. The jump results from the combination
of small shifts in investing confidence combined with much-improved
views of current personal finances.
- Confidence in job security is traditionally one of the
most robust and resilient indicators of consumer confidence,
and remained the strongest facet of consumer sentiment this
month. The RBC Jobs Index for May stands at
123.8, down slightly from 126.4 in April. Consumers hold
a split view of job security: Compared to six months ago,
consumers are more pessimistic about job security. However,
personal job loss experience in May remained unchanged.
The steep decline in future expectations is not surprising,
considering only one-quarter of Americans believe that the
country is headed in the right direction. Even job security,
traditionally a stronghold of confidence, dipped slightly
in May. However, the stabilization of consumer sentiment in
May 2007 after months of softening confidence potentially
points toward continued improvement going forward.
The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.
About RBC
RBC (RY on NYSE and TSX) is Canada's largest bank as measured
by assets and market capitalization and 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 2 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, public sector and institutional clients
throughout offices in North America and 34 countries around
the world. For more information, please visit www.rbc.com.
- 30 -
Contacts:
Mary Mulkerin, The Hubbell Group, Inc., (781) 878-8882
Kevin Foster, RBC Capital Markets, (212) 428-6902
|
|
