Consumers Remain Cautious on the Economy
NEW YORK, Sept. 3 /CNW/ - Although consumers' hopes for their local
economies and personal finances improved in the past month, the most recent
results of the RBC CASH (Consumer Attitudes and Spending by Household) Index
rose by only 2.5 points to stand at 40.0 - up from a 37.5 reading in August.
While the Index reached its highest level since May, a close reading of the
results finds consumers remaining cautious about economic recovery.
"The top-line RBC Index continues to rise, but consumers clearly remain
cautious," said RBC Capital Markets U.S. economist Tom Porcelli. "The headline
received a boost from expectations about the future, but the here-and-now
'current conditions' index fell yet again. Given the strong relationship that
exists between the current conditions index and consumer spending, this is not
an encouraging signal, as the rise in the overall RBC Index should be taken
with a grain of salt."
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
August 27-31, 2009, by survey-based research company Ipsos Public Affairs. The
margin of error was +/-3.1 per cent.
Although consumer sentiment reached its highest level since May after a
volatile summer, there were mixed results in the RBC Index's four sub-indices,
which measure consumers' views of current conditions, their expectations for
the future and their confidence in investing and job security. Highlights of
the survey results include:
- After rebounding strongly in August, consumers' expectations
regarding future economic conditions continued to improve at a slower
rate this month as the RBC Expectations Index for September 2009
climbed to 41.5, up 12.4 points to reach its highest level in 2009.
Currently, 38 per cent of consumers believe the economy in their
community will be stronger in the next six months while 18 per cent
believe it will continue to weaken. Two months ago, consumers were
split much more closely on this question, 31 per cent/24 per cent.
- Confidence in current conditions resumed a slight downward drift,
with the RBC Current Conditions Index for September 2009 standing at
33.2, down 3.4 points from the August 36.6 reading. Vacations and
back-to-school expenses contributed to a downturn in confidence in
personal finances. The percentage of consumers saying their personal
financial situation is weak has increased to 37 per cent in September
from 32 per cent last month. However, consumers are slightly more
confident about their local economy than they were in August.
Currently, only 42 per cent of consumers say the local economy is
currently weak, an improvement from the 44 per cent who said their
local economy was weak last month.
- The RBC Investment Index slipped 7 points this month to 36.9 from a
43.9 level in August. Confidence in investing is shaky, with just
34 per cent of consumers saying that now is a good time to invest in
the markets and 48 per cent recommending investing in real estate. At
the same time, the number of consumers who feel confident about
investing for the future continues to improve, climbing to
31 per cent this month, from 28 per cent in August.
- Reported job loss continues to inch downward, and the RBC Jobs Index
for September remains near its historical low, essentially holding
steady at 53.5, up 0.3 points from the 53.2 observed in August. The
most significant influence on confidence in job security continues to
be real experiences in job loss: Currently, 63 per cent of consumers
say they or someone in their close circle has lost a job in the last
six months. However, this marks a decline over the peak job-loss rate
of 65 per cent observed in May through July.
The RBC Index report can be viewed at:
For further information:
For further information: Loretta A. Healy, The Hubbell Group, Inc.,
(781) 878-8882; Kait Conetta, RBC, (212) 428-6409