Post-holiday blues send consumer confidence to lowest level in six years, according to RBC CASH Index



    NEW YORK, Jan. 11 /CNW/ - Instead of bringing consumers a sense of
renewed optimism, the New Year brought a severe case of post-holiday blues
which have taken a serious toll on consumer sentiment, according to the most
recent results of the RBC CASH (Consumer Attitudes and Spending by Household)
Index. Consumer confidence fell across the board and Americans' expectations
for the future dipped into negative territory, according to the survey of
1,027 Americans taken earlier this week. As a result, the overall RBC CASH
Index, released today by RBC, stands at 56.3 for January 2008, more than nine
points below December's 65.9 level.
    "The decline in the overall Index, to its lowest level since data
collection began in 2002, highlights the impact that rising food and fuel
costs and declining housing values are having on consumer confidence, said T.
J. Marta, Economic and Fixed Income Strategist for RBC Capital Markets." With
none of these headwinds likely to abate any time soon, consumers could pull
back further on spending, increasing the risk of a recession.
    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 1,027 U.S. adults polled from
January 7-9, 2008, by survey-based research company Ipsos Public Affairs. The
margin of error was plus or minus 3.1 per cent.

    
    Highlights of the survey results include:

    -   Consumers' economic outlook plummeted into negative territory during
        the past month, as seen in the RBC Expectations Index, which reached
        -8.2, compared to 7.9 in December. January's reading represents the
        weakest level of optimism for future conditions since Hurricane
        Katrina hit. The downturn in the index is being driven by
        expectations that the economy as a whole will be weaker six months
        from now. Nearly one in three Americans (27 per cent) believe that
        their local economy will weaken in the coming months; currently, only
        one in five consumers (19 per cent) believe their local economy will
        be stronger six months from now.

    -   The RBC Current Conditions Index slid more than six points in
        January, down to 78.9, compared to 85.3 in December. Worries over the
        current state of the economy outweighed positive views, with one-
        third of Americans (32 per cent) rating their local economy as weak,
        considerably more than the 15 per cent who rate their local economy
        as strong.

    -   Americans' dim view of their future prospects and current conditions
        was mirrored in their outlook for making investments or major
        purchases. The RBC Investment Index declined more than three points
        to 76.3 this month, compared to 79.7 in December. The shift in
        consumers' investment confidence was driven by a decline in their
        confidence in investing for the future. In January, only 33 per cent
        of Americans reported they are more confident in their ability to
        invest in the future, compared to 37 per cent last month. Confidence
        in stock market dropped sharply as fewer than one-third (30 per cent)
        of consumers indicated that the next month will be a good time to
        invest in the stock market, down from 36 per cent in December.

    -   Americans' perception of job security dropped this month, but remains
        relatively strong. The RBC Jobs Index for January stands at 106.9,
        compared to 113.9 last month. Personal job loss experience increased
        by four points this month, with 37 per cent of consumers reporting
        job loss in their immediate circle, compared to 33 per cent in
        December. In addition, only 32 per cent of Americans reported feeling
        more confident about their job security, down four points from last
        month.
    

    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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