Consumer Confidence Slides As Joblessness Snowballs, According to RBC CASH Index



    But Four in Ten Consumers Say Country Is Now on the Right Track

    NEW YORK, Feb. 12 /CNW/ - Continuing a year-long decline, U.S. consumer
sentiment hit new all-time lows in February on news of accelerating
joblessness, according to the most recent results of the RBC CASH (Consumer
Attitudes and Spending by Household) Index. As a result, the overall RBC CASH
Index stands at 1.6 for February 2009, down from 13.3 in January. This is the
first time in the seven-year history of the Index that it has dropped into the
single digits.
    "The continued decline of consumer confidence comes in the face of rising
unemployment and reports of big layoffs by major employers," said Marc Harris,
co-head of Global Research, RBC Capital Markets. "The bright side is that,
just weeks after President Obama's inauguration, four in ten consumers say
that the country is now on the right track, a sharp turnaround from the past
year. However, presidential honeymoons are shorter these days, and consumers
are likely to expect the new administration to quickly show it is in command
and has a plan to turn things around."
    The RBC CASH 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
February 5-9, 2009, by survey-based research company Ipsos Public Affairs. The
margin of error was +/-3.1 per cent.

    
    Highlights of the survey results include:

    -   With almost 600,000 Americans losing their jobs in January and
        unemployment climbing to 7.6 per cent, the RBC Jobs Index saw a drop
        of nearly 20 points in February to 42.3, compared to 61.8 last month.
        The February number was the largest single-month decline since the
        Index was introduced, and the fifth straight month in which this
        index has hit a new low. Declines in job security follow real
        experiences in job loss: More than three in five Americans
        (62 per cent) say they or someone in their close circle have lost
        their job in the past six months, up from 53 per cent last month.

    -   Showing the effects of growing anxiety over job losses, the RBC
        Expectations Index declined to -28.1 in February from -11.3 in
        January. There is a bright spot: The number of Americans who say that
        the country is on the right track jumped to 42 per cent in February
        from the 20s and low 30s, where it had been mired for most of the
        last year.

    -   The RBC Current Conditions Index dropped to another all-time low in
        February and currently stands at 1.6, compared to 8.7 last month.
        This is the fourth consecutive month in which this index has hit a
        new all-time low. Consumers are increasingly feeling the effects of
        the recession, with two in five (39 per cent) saying their personal
        financial situation is currently weak and two-thirds (67 per cent)
        saying they now are less comfortable making household purchases than
        they were six months ago.

    -   The RBC Investment Index currently stands at 17.6, down from 22.5 in
        January. This index has also declined to an all-time low for the
        fourth consecutive month. Two-thirds (66 per cent) of consumers
        continue to say they are less confident now than they were six months
        ago in their ability to make investments for the future, and
        70 per cent think it is a bad time to invest in the stock market.
    

    "Consumer confidence and economic recovery are in a chicken-and-the-egg
situation. The economy can't begin to recover without people spending and
investing. Yet without signs of recovery, consumers and investors will stay on
the sidelines," added Harris.
    The entire RBC CASH Index report can be viewed at:
www.rbc.com/newsroom/rbc-cash-index.html.





For further information:

For further information: Loretta A. Healy, The Hubbell Group, Inc.,
(781) 878-8882; Kevin Foster, RBC Capital Markets, (212) 428-6902


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