Consumer confidence rises for third consecutive month, according
to RBC CASH Index
More than half of consumers say country is now on the right
NEW YORK, May 7, 2009 — Driven by reduced concern
about current economic conditions and diminishing fears of
job loss, U.S. consumer sentiment continued to rebound this
month, according to the most recent results of the RBC CASH
(Consumer Attitudes and Spending by Household) Index. As a
result, the overall RBC CASH Index stands at 43.0 for May
2009, up from 38.3 in April and from 1.6 in February, its
all-time low. This is the first three-month rally for the
Index since the last quarter of 2005.
"Better-than-expected news about the economy and corporate
earnings is helping consumers to recognize that the worst
is behind us," said RBC Capital Markets Managing Director
Larry Miller. "Their growing confidence is seen in the
continued improvement of the RBC Jobs Index, which suggests
that consumers have less fear of losing their jobs. That may
lead to a revival in spending, further driving economic recovery."
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 1-5,
2009, by survey-based research company Ipsos Public Affairs.
The margin of error was ±3.1 per cent for all respondents.
Highlights of the survey results include:
- The RBC Jobs Index saw a rise of 9.2 points
in May to 54.4, compared to 45.2 last month, the second
consecutive increase in the Jobs Index following six straight
months of declines. Typically, declines in the feeling of
job security follow real experiences in job loss, but this
time confidence is improving even while unemployment is
still growing nationally. Expectations for future employment
show the strongest improvement: Thirty-two per cent of consumers
say it is likely that they or someone in their family or
friends will lose their job in the next six months, down
from 42 per cent in February.
- The RBC Expectations Index showed little
change in May, holding at 34.0, up 1.6 points from the 32.4
observed in April. Currently, 36 per cent of consumers believe
the economy in their community will be stronger in the next
month, while only 20 per cent believe it will continue to
weaken, roughly the same split as in April.
- The RBC Current Conditions Index currently
stands at 45.0, up 9.2 points from last month's 35.8. Consumers'
confidence in both their local economy and their personal
finances continued to show small improvements in May. The
share of consumers who say that their personal financial
situation is strong rose slightly this month, to 25 per
cent, compared to 23 per cent in April.
- The RBC Investment Index currently stands
at 49.6, up 4.8 points from April's 44.8. While most of
the increase in investment confidence stems from improvements
in respondents' personal financial condition, consumers
are also showing growing comfort with investment and major
spending. The number of consumers who say they are confident
about investing for the future edged up to 28 per cent this
month, up from 24 per cent last month.
"Consumers aren't ready to celebrate, but they clearly
are regaining confidence in the economy and their own personal
prospects. That is important, because genuine economic recovery
will be the result of millions of Americans having enough
confidence to get off the sidelines and start spending and
investing again," said Miller.
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