U.S. consumer confidence hovers near six-year low, according
to RBC CASH Index
Expectations for the future return to negative territory
NEW YORK, December 11, 2008 — Consumer sentiment
plunged to a near all-time low as Americans continued to be
bombarded with bleak economic news, according to the most
recent results of the RBC CASH (Consumer Attitudes and Spending
by Household) Index. The survey found that, while consumer
attitudes regarding investing show signs of stabilizing, Americans'
confidence in their future personal financial conditions,
current conditions and the jobs market continue to erode.
As a result, the overall RBC CASH Index stands at 15.3 for
December, 19.4 points below November's 34.7 level, and nearly
in line with the all-time low of 14.6 reached in July 2008.
"The rebound in sentiment in late summer due to falling
oil prices has been almost completely reversed as newer problems,
including the credit crunch, deteriorating jobs market and
problems in Detroit, have erupted," said T.J. Marta,
Economic and Fixed Income strategist for RBC Capital Markets.
"Consumer sentiment is back near the record low reached
in July, and that is consistent with consumers retrenching
in what is likely to prove a hard landing for the economy."
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 December
4 - 8, 2008, by survey-based research company Ipsos Public
Affairs. The margin of error was ±3.1 per cent.
Highlights of the survey results include:
- The RBC Jobs Index dropped more than 8 points
in December to 65.6, compared to 74.0 last month. Personal
job loss experience has now touched half of all Americans,
as 50 per cent of consumers report job loss in their immediate
circle, compared to 48 per cent last month and 43 per cent
- Americans' gloomy outlook was underscored by the plunge
seen in the RBC Expectations Index, which
dropped 44.5 points, to -21.2, the first time the index
has been in negative territory since August 2008. The sharp
decline in the index is being driven by job worries and
a drop in consumers' expectations for their local economy.
In December, nearly one-third of consumers (31 per cent)
believe their local economy will be weaker six months from
now, up from 24 per cent last month.
- The RBC Current Conditions Index dropped
to an all-time low in December and currently stands at 16.5,
compared to 25.6 last month. Consumers' worries over the
current state of their local economy fed the decline in
the index, as more than half of all Americans (53 per cent)
rate their local economy as weak to very weak, up from 46
per cent last month. Ratings of current personal finances
also declined, with 36 per cent of Americans rating their
current financial situation as weak, compared to 33 per
cent in November.
- Americans' overall opinions regarding investing remained
relatively stable this month although at the lowest level
ever. The RBC Investment Index, which was
at 34.8 in November, currently stands at 31.0, a new low
since the index was created in 2002. Americans continue
to be cautious about making major purchases and, two-thirds
of Americans (65 per cent) now believe the next 30 days
will be a bad time to invest in the stock market, versus
62 per cent last month.
The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.
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Loretta A. Healy, The Hubbell Group, Inc., (781) 878-8882
Kevin Foster, RBC Capital Markets, (212) 428-6902