Season of good cheer: U.S. consumer confidence twice as
strong as a year ago, according to RBC Index
NEW YORK, December 10, 2009 — After sliding
for much of the fall, consumer confidence climbed in the past
month and is now more than twice as strong as it was a year
ago, according to the most recent results of the RBC CASH
(Consumer Attitudes and Spending by Household) Index. Driven
by a strong upswing in expectations for the near-term economic
future, the RBC Index for December 2009 stands at 39.0, up
8 points from November's 30.2 reading. A year ago, in December
2008, the RBC Index stood at 15.3.
"Traditionally, the holidays are a season of hope and
optimism. Despite continuing high unemployment and weak assessments
of personal finances, the RBC Index shows that American consumers
are optimistic that the economy will soon begin to improve,"
said RBC Capital Markets U.S. economist Tom Porcelli. "However,
overall consumer confidence remains low and susceptible to
negative news, which could create more pointed fluctuations
in consumer confidence in the near- to medium-term period."
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
1,002 U.S. adults polled from December 3-6, 2009, by survey-based
research company Ipsos Public Affairs. The margin of error
was ±3.1 per cent.
Improvements this month were seen across all facets of consumer
confidence as reflected in the RBC Index's four sub-indices.
Highlights of the survey results include:
- Confidence in current conditions improved in the last
month, with the RBC Current Conditions Index for
December 2009 standing at 37.0, up 8 points from the November
reading of 28.8. Consumers report they are more comfortable
purchasing not only household products but also major items
such as a house or car. However, the percentage of consumers
rating their personal financial situation as "weak"
remains at roughly one-third; in comparison, only 21 per
cent rate their current personal finances as strong.
- Consumer expectations for the near-term economic future
improved significantly in December, driven primarily by
increasingly positive attitudes regarding the local economy.
This movement, coupled with marginal improvements in expectations
for personal finances, helped the RBC Expectations
Index for December jump to 40.4, an 18-point increase
from the 21.9 reading in November.
- The RBC Investment Index climbed 10 points
this month, to 46.9 from a 36.6 level in November. The improvement
in investment confidence stems from both increasing confidence
in the ability to invest in the future. Gains in investment
confidence and the stability of assessments of personal
finance contribute to the improvement. Among the groups
expressing more confidence were young people (under age
35), African-Americans and Hispanics.
- The RBC Jobs Index for December edged up
0.5 points to stand at 51.4, compared to 50.9 in November.
Six in ten consumers (62 per cent) report they are less
confident about job security (compared to 66 per cent in
November). Confidence in the job market has held steady
over the past month despite more Americans saying they or
someone in their close circle has lost a job in the last
six months. Seven-in-10 Americans (71 per cent) personally
know someone who has lost a job, up from 66 per cent in
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