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New year off to strong start: U.S. consumer confidence
reaches highest level since September 2008, according to RBC
Index
NEW YORK, January 14, 2010 — After declining
throughout much of 2009, American consumer confidence improved
sharply this month, returning to levels not seen since the
financial crisis began in September 2008, according to the
most recent results of the RBC CASH (Consumer Attitudes and
Spending by Household) Index. Driven by the largest-single-month
gain in expectations for jobs since the inception of the Index
eight years ago, the RBC Index for January 2010 stands at
58.3, up 19.3 points from its December 2009 reading of 39.0.
“This month’s RBC Index has risen to levels not seen since
the financial crisis hit with full force,” said RBC Capital
Markets U.S. economist Tom Porcelli. “The latest increase
seems to be based on the recent string of positive economic
news. This bodes well for continued improvement in consumer
confidence, which will be crucial to economic 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
1,002 U.S. adults polled from January 7-10, 2010, by survey-based
research company Ipsos Public Affairs. The margin of error
was ±3.1 percent.
Highlights of the survey results include:
- Americans' confidence in the job market improved dramatically
this month, as evidenced by a 16.5 point increase in the
RBC Jobs Index to 67.9 - the largest single-month
gain ever observed in the Index. Declining job losses correspond
with consumers' sense of job security - according to the
Index, 30 percent of consumers feel more confident about
their jobs. Likewise, concern that job losses are looming
has declined over the last month. Personal job loss experience
improved in January, with 62 percent of consumers reporting
job loss in their immediate circle, compared to the high
of 71 percent in December.
- Consumers' economic outlook also brightened considerably
this month, sending the RBC Expectations Index
to 67.6, up 27.2 points from December's level of 40.4 and
the highest level since September 2008. An increase in consumer's
expectations for both their local economies and their personal
finances coupled with gains in job security resulted in
the overall Expectations Index improving. Currently, 38
percent of consumers believe the economy in their community
will be stronger six months from now (compared to 35 percent
last month), while only 15 percent believe it will continue
to weaken (compared to 19 percent in December.)
- Fueled by a striking increase in consumer optimism, the
RBC Current Conditions Index also reached
a 15-month high in January as it climbed to 51.6, up 14.6
points from last month's reading of 37.0. The percentage
of consumers rating their personal financial situation as
strong increased to 25 percent this month from 21 percent
in December. The share of Americans' rating their personal
financial situation as weak held steady at 32 percent, the
same reading as in December.
- Mirroring the improvement in the overall index and the
current conditions index, the RBC Investment Index
advanced 11.2 points this month to 58.1, compared to December's
46.9 level. Consumers who feel confident about investing
for the future held steady in January at 33 percent more
confident, compared to 35 percent in December. Consumer
comfort levels for investing in the stock market also edged
up, with 37 percent saying that now is a good time to invest
in the stock market, compared to 32 percent in December.
Americans are also feeling more confident about investing
in real estate. In January, 44 percent of consumers said
they believe the next month will be a good time to buy real
estate, compared to only 41 percent last month.
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
Kait Conetta, RBC, (212) 428-6409
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