Half of Americans report job hunting is more difficult than
a year ago, according to RBC Consumer Outlook Index
Despite Jobs Worries, Overall Consumer Confidence Rises for April
NEW YORK, March 31, 2011 Half of U.S.
consumers (49 per cent) think that it has become more difficult
to find a job compared to a year ago, while just 14 per cent
think it has become easier and a third (37 per cent) believe
conditions are about the same, according to this month's RBC
Consumer Outlook Index. The results are based on a survey
of more than 1,000 Americans.
"The Jobs Sub-Index, which rose slightly this month,
has remained just above the breakeven point for the past five
months, and this suggests that employment gains are likely
to remain modest in the near-term," said Tom Porcelli,
chief U.S. economist at RBC Capital Markets. "In addition,
only 48 per cent of consumers who are either unemployed or
underemployed, or who know someone who is, are willing to
change careers or learn new skills. This finding suggests
a lack of capitulation by job-seekers, which likely contributed
to the natural rate of unemployment rising from five per cent
to closer to seven per cent. The absorption process for the
unemployed may be a slow, drawn-out affair."
Continued sluggishness in the housing market is also limiting
options for the unemployed or underemployed. Only one-in-four
(23 per cent) who fall into these categories are willing to
move somewhere with more jobs, and 20 per cent are willing
to move, but are not likely to do so because of the difficulty
of selling their home.
"The recent analysis about the unemployed suggests that
the decline in housing prices coupled with the inability to
sell a home could limit workers' mobility," said Porcelli.
"Twenty per cent of respondents said they would be willing
to move but that selling their home would be difficult. This
is consistent with the 23 per cent of residential properties
with underwater mortgages."
While Americans remain concerned about jobs, consumer confidence
for April rose moderately after declining in each of the previous
three months, with the RBC Consumer Outlook Index rising to
44.8, up 2.3 points from March's 42.5.
"Consumer confidence rose, though it remains quite low
from an historical perspective," said Porcelli. "While
events in Japan are still evolving, it appears at this point
that the U.S. recovery will remain on track. Nevertheless,
the ongoing instability in the Middle East region and the
commensurate back-up in oil prices have continued to weigh
on overall confidence."
This month's increase in the RBC Consumer Outlook Index
was reflected in strengthening sentiment across all of the
sub-indexes. The improving consumer sentiment is driven primarily
by the Current Conditions Sub-Index, which climbed to 35.9
for April from 32.4 last month, rising to its highest level
since January 2010. While only 13 per cent rate their current
finances as "strong," the number who perceive their
finances as "weak" declined to 41 per cent, down
from 47 per cent last month and the lowest level in more than
"Of all the underlying metrics, this has the strongest
predictive power when it comes to consumer spending. With
two-thirds of the economic data for the first quarter already
in hand, it appears that consumer spending is poised to grow
at a three per cent rate. The RBC Consumer Outlook Index suggests
that spending likely slowed in March but given the sharp rebound
in current conditions this month, any slowing will likely
represent a bump in the road and not a change in the upward
trend," said Porcelli.
Additionally, the Jobs
Sub-Index rose slightly this month to 51.8, from March's
50.1. The Expectations
Sub-Index edged up to 54.5 for April from 53.6 in March.
Confidence Sub-Index improved appreciably, climbing to
39.5 from 36.3 last month. Consumer pessimism about ability
to invest for the future decreased for April to levels not
seen since December 2010. Those believing it will be a bad
time to invest in the stock market dropped to 31 per cent,
from 39 per cent in March.
Expectations Sub-Index, which began in December 2010 and
does not play into the overall calculation of the Consumer
Outlook Index, stayed basically unchanged, edging down slightly
to 77.2 from 77.4 in March. Consumers expect prices to continue
increasing in all major categories except home prices.
Despite the improvement in consumer confidence, worries remain
about the nation's long-term future. Two-thirds of Americans
(67 per cent) said that the country is on the wrong track,
the same as in March and the twelfth consecutive month at
or above the 60 per cent mark.
About The RBC Consumer Outlook Index
U.S. Consumer Outlook Index provides the most up-to-date
and comprehensive outlook of U.S. consumers based on data
collected from interviews with a nationally representative
sample of more than 1,000 U.S. adults conducted over a multi-day
polling period each month by Ipsos, the world's second-largest
market and opinion research firm. The results in this news
release reflect some of the findings of the Ipsos poll of
1,006 U.S. adults conducted March 24-27, 2011. The RBC Consumer
Outlook Index is released within 36 hours after the U.S. online
panel members are interviewed. Weighting is employed to balance
demographics and ensure that the survey sample's composition
reflects that of the U.S. adult population according to Census
data and to provide results intended to approximate the sample
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Elisa Marks, RBC
Capital Markets, (212) 618-2057
Greg Hamrock, Hubbell Group,