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U.S. consumer sentiment rebounds from summer doldrums, according
to RBC Index
Positive economic news and rising markets driving improved
consumer confidence, but Jobs Index remains low
NEW YORK, August 6, 2009 — Led by rising investment
confidence and expectations for the future, the most recent
results of the RBC CASH (Consumer Attitudes and Spending by
Household) Index show a sharp upswing in consumer sentiment
for August 2009, reversing the slide of the previous two months.
The RBC CASH Index for August stands at 37.5,
a 15.1 point increase from July's 22.4 reading. Although consumer
sentiment remains volatile, the Index saw improvement in all
four of its sub-indices, which measure consumers' views of
current conditions, their expectations for the future and
their confidence in investing and job security.
"The RBC Index for August showed a strong bounce in
overall confidence but, as the relatively low readings in
the sub-indices show, the economic recovery continues to face
a number of headwinds, particularly in the job market,"
said RBC Capital Markets' U.S. Economist Tom Porcelli. "On
that front, the RBC Jobs Index remains at a relatively low
level and suggests a continued difficult labor backdrop to
any recovery."
The RBC 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 July 30-August 3, 2009, by survey-based
research company Ipsos Public Affairs. The margin of error
was ±3.1 per cent.
Highlights of the survey results include:
- Consumers' expectations regarding future economic conditions
rebounded strongly this month, as the RBC Expectations
Index for August 2009 surged to 29.1, up 24.3 points
from 4.8 in July. Economic expectations remain the most
volatile aspect of consumer sentiment. Currently, 34 per
cent of consumers believe the economy in their community
will be stronger in the next six months, while 19 per cent
believe it will continue to weaken. Just last month, consumers
were split much more closely on this question, 31 percent/24
per cent.
- Confidence in current conditions has jumped after declines
in the past two months, with the RBC Current Conditions
Index for August 2009 standing at 36.6, up 13.3
points from July's 23.3. Consumer comfort with making general
household purchases has strengthened after several months
of declines. In August, 25 per cent of consumers say they
are "more comfortable" making household purchases
than they were six months ago, up six points from the 19
per cent saying the same in July and equalling the highest
level seen in a year.
- The RBC Investment Index showed strong upward
movement this month, rising to 43.9, a 13-point increase
from July's level of 30.9. After a month-long stock market
rally, the share of American consumers who are confident
investing for the future improved to 28 per cent this month,
from 22 per cent in July. Moreover, 36 per cent of consumers
say it is a good time to invest in the markets, up from
25 per cent in July. This is the highest level of confidence
in the markets since the end of 2007.
- Amidst signs that the rate of job loss is slowing, the
RBC Jobs Index for August rose to 53.2, up
2.7 points from the 50.5 observed in July. Despite the uptick,
the Jobs Index remains well below the 85.8 level recorded
a year ago. The biggest negative influence on confidence
in job security continues to be real experiences in job
loss. Two-thirds (64 per cent) of American consumers continue
to say they or someone in their close circle have lost a
job in the last half-year, the same rate observed over the
last five months.
The RBC 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, (212) 428-6902
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