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U.S. consumer confidence tumbles following January rally,
according to RBC Index
NEW YORK, February 4, 2010 — U.S. consumer
confidence cooled this month as worries over every facet of
their financial situation mounted, according to the most recent
results of the RBC CASH (Consumer Attitudes and Spending by
Household) Index. Economic attitudes soured across the board,
with consumers viewing the current economy negatively and
displaying increased pessimism about the future. As a result,
the RBC Index for February 2010 stands at 39.4, down 18.9
points from January's 58.3 reading.
"Although numerous economic indicators are trending
in a favorable direction, it's evident that 'less-bad' is
just not good enough for U.S. consumers," said RBC Capital
Markets U.S. economist Tom Porcelli. "This month's reading
suggests that consumers continue to feel financial pressure
from recent volatility in stocks and a soft job market."
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 January 28 - February 1, 2010,
by survey-based research company Ipsos Public Affairs. The
margin of error was ±3.1 per cent.
Highlights of the survey results include:
- Confidence in current conditions deteriorated sharply
during the past month, as seen in the RBC Current
Conditions Index, which stands at 30.5, a dramatic
decline from January's 51.6 level. The drop in the index
is due to a significant weakening in consumers' evaluations
of the state of their local economies as well as their pocketbooks.
Currently, almost half of all Americans (46 per cent) rate
their local economy as weak, up from 40 per cent in January.
Consumers' unease with personal finances is reflected in
lower confidence in making major purchases such as a house
or car: two-thirds of Americans (65 per cent) report they
are less comfortable than they were six months ago, compared
to 62 per cent who were less comfortable in January.
- Americans' confidence in the future waned considerably
as the RBC Expectations Index dropped nearly
20 points this month to 48.0, down from 67.6 in January.
Consumers' near-term concerns about their local economies
and personal finances are driving the downturn in the index.
Currently, only one-third of Americans (34 per cent) expect
their local economy to be stronger six months from now,
down from 38 per cent last month. This month also found
that 13 per cent of Americans expect their personal finances
to be weaker six months from now, compared to 11 per cent
in January.
- Although it fell less than the other sub-indices, the
RBC Jobs Index saw a drop of 13 points in
February to 54.9, compared to 67.9 last month. Two-thirds
of Americans (67 per cent) say they or someone in their
close circle have lost their job in the past six months,
up from 62 per cent in January. In addition, fewer than
one-third of consumers (29 per cent) are confident they
or someone in their circle will not lose their job
in the next six months, down from 37 per cent in January.
- Consumers' confidence in the investment climate also soured
considerably this month, resulting in a 17.3 point drop
in the RBC Investment Index to 40.8, compared
to 58.1 in January. The slide stems primarily from decreased
confidence in the ability to invest in the future. The number
of consumers who say they are less confident investing for
the future has risen to 57 per cent, up from 54 per cent
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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