NEW YORK, October 6, 2011 While the news has been dominated by the European debt crisis, worries about jobs are what weighs most on U.S. consumer sentiment, according to the latest RBC Consumer Outlook Index. Amid concerns about job security, consumer confidence remained nearly flat for October, the third consecutive month with little change. The RBC Consumer Outlook Index dipped to 39.2, down one point from last month. Consumer confidence is below the level of a year ago (41.0) and also below the average level during the recession (40.2).
Although global economic issues may not be leading consumer sentiment, most Americans (59 per cent) are following developments in the European financial crisis. More than one-third of Americans overall (36 per cent) say that the crisis has worsened their confidence in the U.S. economy.
Despite recent market volatility, nearly half (47 per cent) of Americans have not made any changes to their retirement fund contributions. Seven per cent have shifted away from stocks, six per cent have decreased their retirement fund contributions and two per cent have increased contributions.
The dip in consumer confidence this month was driven by a drop in the RBC Jobs Index, which fell 3.3 points to stand at 47.2, its lowest level since March 2010. Nearly half (46 per cent) of consumers say they or someone they are close to has lost a job in the last six months, up nine points from last month. Consumers are increasingly worried about job security, with one-in-three (34 per cent) saying they are currently concerned about losing their job, up six points from last month.
"Jobs remain the biggest driver of confidence, and growing worries about employment security are affecting the consumer outlook," said Tom Porcelli, chief U.S. economist at RBC Capital Markets. "But as our survey shows, you can't overlook the impact the European crises is having on US confidence. We are quite literally layering more worries into an already fragile psyche."
While the RBC Jobs Index declined, the other three sub-indexes improved slightly from last month, though not enough to fully offset the increased worries about employment:
Three-in-four Americans (75 per cent) say the U.S. is on the wrong track, the same as in September, and up from 63 per cent in October 2010.
About The RBC Consumer Outlook Index
The RBC 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 1,007 U.S. adults conducted on September 29-October 2, 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 universe.
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