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Consumer confidence remains unchanged from November collapse,
according to RBC CASH Index
NEW YORK, December 7, 2007 — Although the holiday
season has arrived, U.S. consumers are not feeling very merry,
according to the most recent results of the RBC CASH (Consumer
Attitudes and Spending by Household) Index. The survey, which
measured the attitudes of 1,009 Americans earlier this week,
found that consumer sentiment remained low, but stable, following
a significant drop in November. While Americans' expectations
for future prospects and their confidence in jobs improved
slightly, their evaluations about current conditions and investments
continued to decline. As a result of these mixed sentiments,
the RBC CASH Index for December 2007 stands at 65.9, compared
to 64.0 in November.
"Consumer sentiment remains stuck at very low levels,"
said T. J. Marta, Economic and Fixed Income Strategist for
RBC Capital Markets. "Consumers have been seeing high
gasoline and oil prices, a struggling stock market and falling
housing sales and prices. And now they see worrisome headlines
that financial companies thought to have been safe from the
subprime mortgage debacle are running into trouble."
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 1,009 U.S. adults polled from December
3-5, 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:
- After free-falling into negative territory in November,
Americans' expectations regarding future economic conditions
inched up this month. The RBC Expectations Index
for December stands at a tepid 7.9, up 12 points from -4.3
last month. This month, 22 per cent of consumers report
they expect their local economy to be stronger six months
from now, compared to 19 per cent in November, while one
quarter (25 per cent) expect their local economy to be weaker
in six months, compared to 27 per cent last month. Job loss
expectations also contributed to the improvement, as those
reporting future job loss is likely declined slightly this
month to 16 per cent, compared to 19 per cent in November.
- The RBC Current Conditions Index slipped
again this month reaching 85.3, down 5 points from November's
90.3 level, and down more than 15 points from October when
it stood at 101.1. A decline in Americans' comfort with
making household purchases was the main driver behind the
decline, a potentially troubling sign for retailers during
this holiday shopping season. Consumers' comfort level for
making household purchases dipped to 32 per cent in December
from 34 per cent last month, and their discomfort level
reached 49 per cent this month, compared to 47 per cent
in November.
- The RBC Jobs Index registered a small gain
this month, reaching 113.9, compared to 111.8 in November,
as Americans' concerns over job security stabilized. Personal
job loss experience in December decreased by two points,
with 33 per cent of consumers reporting job loss in their
immediate circle, compared to 35 per cent last month. Americans
reporting no personal job loss in their immediate circle
also increased two points, reaching 66 per cent this month,
compared to 64 per cent in November.
- Consumers' views of the investment climate continued to
cool in December bringing the RBC Investment Index
down another four points to 79.7, compared to 83.4 last
month. While consumer comfort levels for future investments
held steady at 37 per cent, and the percentage of Americans
reporting they are less confident in investing remained
unchanged from November's 46 per cent, the decline in consumers'
perceptions of their personal finances and their comfort
level in making household purchases contributed to the decline
in the RBC Investment Index.
The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.
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Contacts:
Loretta A. Healy, The Hubbell Group, Inc., (781) 878-8882
Kevin Foster, RBC Capital Markets, (212) 428-6902
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