Dog days: U.S. consumer sentiment flat at summer's end,
according to RBC Index
Consumers remain cautious on the economy
NEW YORK, September 3, 2009 — Although consumers'
hopes for their local economies and personal finances improved
in the past month, the most recent results of the RBC CASH
(Consumer Attitudes and Spending by Household) Index rose
by only 2.5 points to stand at 40.0 -- up from a 37.5 reading
in August. While the Index reached its highest level since
May, a close reading of the results finds consumers remaining
cautious about economic recovery.
"The top-line RBC Index continues to rise, but consumers
clearly remain cautious," said RBC Capital Markets U.S.
economist Tom Porcelli. "The headline received a boost
from expectations about the future, but the here-and-now 'current
conditions' index fell yet again. Given the strong relationship
that exists between the current conditions index and consumer
spending, this is not an encouraging signal, as the rise in
the overall RBC Index should be taken with a grain of salt."
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 August 27-31, 2009, by survey-based
research company Ipsos Public Affairs. The margin of error
was ±3.1 per cent.
Although consumer sentiment reached its highest level since
May after a volatile summer, there were mixed results in the
RBC Index's four sub-indices, which measure consumers' views
of current conditions, their expectations for the future and
their confidence in investing and job security. Highlights
of the survey results include:
- After rebounding strongly in August, consumers' expectations
regarding future economic conditions continued to improve
at a slower rate this month as the RBC Expectations
Index for September 2009 climbed to 41.5, up 12.4
points to reach its highest level in 2009. Currently, 38
per cent of consumers believe the economy in their community
will be stronger in the next six months while 18 per cent
believe it will continue to weaken. Two months ago, consumers
were split much more closely on this question, 31 per cent/24
- Confidence in current conditions resumed a slight downward
drift, with the RBC Current Conditions Index
for September 2009 standing at 33.2, down 3.4 points from
the August 36.6 reading. Vacations and back-to-school expenses
contributed to a downturn in confidence in personal finances.
The percentage of consumers saying their personal financial
situation is weak has increased to 37 per cent in September
from 32 per cent last month. However, consumers are slightly
more confident about their local economy than they were
in August. Currently, only 42 per cent of consumers say
the local economy is currently weak, an improvement from
the 44 per cent who said their local economy was weak last
- The RBC Investment Index slipped 7 points
this month to 36.9 from a 43.9 level in August. Confidence
in investing is shaky, with just 34 per cent of consumers
saying that now is a good time to invest in the markets
and 48 per cent recommending investing in real estate. At
the same time, the number of consumers who feel confident
about investing for the future continues to improve, climbing
to 31 per cent this month, from 28 per cent in August.
- Reported job loss continues to inch downward, and the
RBC Jobs Index for September remains near
its historical low, essentially holding steady at 53.5,
up 0.3 points from the 53.2 observed in August. The most
significant influence on confidence in job security continues
to be real experiences in job loss: Currently, 63 per cent
of consumers say they or someone in their close circle has
lost a job in the last six months. However, this marks a
decline over the peak job-loss rate of 65 per cent observed
in May through July.
The RBC 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
RBC, (212) 428-6409