Consumer Confidence Continues its Slump as Financial Worries Mount, According to RBC CASH Index

    Consumer Confidence Drops Across the Board Reaching New Low

    NEW YORK, June 5 /CNW/ - U.S. consumer confidence eroded this month as
Americans' worries over every facet of their financial situation mounted,
according to the most recent results of the RBC CASH (Consumer Attitudes and
Spending by Household) Index. Economic attitudes soured across the board, with
consumers viewing the current economy negatively and displaying deep pessimism
about the future. As a result, the overall RBC CASH Index for June 2008,
released today by RBC, stands at an all-time low of 22.5, dropping nearly
17 points below May's 39.0 level.
    "After improving in May, the RBC CASH Index has resumed the downward
trend that has persisted for most of the past 12 months, as the overall index
and each sub-index fell, and all but the expectations sub-index fell to a new
record low," said T. J. Marta, Economic and Fixed Income Strategist for RBC
Capital Markets. "Despite economic stimulus checks being sent to millions of
Americans, this month's reading indicates consumers are under extreme and
growing financial pressure from falling housing prices, rising food and energy
prices and a softening job market."
    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 May 29 - June 2, 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:

    -   Americans' economic outlook dropped sharply during the past month, as
        seen in the RBC Expectations Index, which fell nearly 20 points to
        -43.9, compared to -24.1 in May. Consumer expectations have now been
        in negative territory (compared to the benchmark of 100, set in
        January 2002) for the past six months, and show few signs of
        improving any time soon. The downturn in the index is being driven by
        consumers' expectations that the economy as a whole will be weaker
        six months from now. More than one-third of Americans (36 per cent)
        believe that their local economy will weaken in the coming months;
        currently, only one in five consumers (22 per cent) believe their
        local economy will be stronger six months from now. The only bright
        spot is that consumers' expectations about their personal finances
        show signs of stabilizing. Currently, 31 per cent of consumers report
        they believe their personal finances will be stronger in six months,
        compared to 26 per cent in August.

    -   The RBC Current Conditions Index slid nearly 17 points in June, down
        to 40.5, compared to 57.4 last month. Although Americans' perceptions
        of the current local economic conditions held steady, ratings of
        current personal finances declined with fewer than one-quarter
        (23 per cent) of consumers rating their current financial situation
        as strong, compared to 30 per cent in May. Consumers' comfort level
        for making household purchases also held steady this month, although
        overall confidence remains low. Twenty-two per cent of Americans said
        they were more confident making a major purchase than they were six
        months ago, up from 19 per cent in May.

    -   The RBC Jobs Index is down nearly seven points to 87.3, its lowest
        level since inception in January 2002. While overall perceptions of
        job security held steady in June at 29 per cent, declining confidence
        in employment is driven by increased personal job loss experience,
        and a reduction in perceptions that job loss experience in the next
        six months is unlikely. Personal job loss experience in June
        increased by four points, with 43 per cent of consumers reporting job
        loss in their immediate circle, compared to 39 per cent in May. And,
        only 40 per cent of consumers said it is unlikely that they or
        someone they know will lose their job in the next six months,
        compared 44 per cent last month.

    -   Consumers' confidence in the investment climate also soured
        considerably this month, resulting in more than a 15 point drop in
        the RBC Investment Index to 45.1 compared to 60.7 in May. The number
        of consumers reporting they are less confident in investing remained
        statistically unchanged at 60 per cent. The drop in confidence
        regarding investment has been trending up, with June's level
        representing a 12-point increase from January, and a 22-point
        increase from one year ago. And, although housing prices continue to
        drop, only 33 per cent of consumers believe the next month will be a
        good time to buy real estate, down from 37 per cent in May.

    The entire RBC CASH Index report can be viewed at:

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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