Consumer confidence drops to lowest level ever on recession fears, according to RBC CASH Index

    NEW YORK, Feb. 8 /CNW/ - Recent comments by President Bush about signs of
weakness in the domestic economy, further rate cuts by the Federal Reserve and
poor jobs data have taken a toll on consumer confidence. Consumer sentiment as
measured by the latest RBC CASH (Consumer Attitudes and Spending by Household)
Index has dropped to the lowest levels since the CASH Index was created
six years ago. The overall RBC CASH Index, released today by RBC, stands at
48.5 for February 2008, almost eight points below January's 56.3 level.
    Continuing a downward trend that has persisted through the last year,
consumer sentiment fell across the board, driven especially by declining
confidence in current conditions and growing worries about job security and
investing, according to the survey of 1,006 Americans taken earlier this week.
    "This month's reading indicates a very poor mood among consumers who are
confronted with news about a housing recession, falling stock prices, problems
in the banking system and a deteriorating overall economic environment," said
T. J. Marta, Economic and Fixed Income Strategist for RBC Capital Markets.
"With consumer spending driving 70 per cent of the U.S. economy, a pullback in
spending increases the risk that the country could tip into 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. Each 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 1,006 U.S. adults polled from
February 4-6, 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:

    -   The RBC Current Conditions Index plunged more than 15 points in
        February, down to 63.6, compared to 78.9 in January. Attitudes toward
        the current state of the economy remained statistically unchanged,
        with 35 per cent of consumers rating the local economy as weak,
        compared to 32 per cent rating it weak in January. Most of February's
        steep decline is due to a significant weakening in people's
        evaluations of their own finances and reduced confidence in making
        household purchases. Currently, one in three American consumers
        (31 per cent) rate their personal finances as weak (up from 27 per
        cent in January).

    -   Consumers' economic outlook remained in negative territory during the
        past month, as measured by the RBC Expectations Index, which climbed
        slightly to - 7.0, compared to - 8.2 in January. However, while
        confidence in the future of the economy has stabilized somewhat, it
        remains near the record low of - 13.5 in the aftermath of Hurricane
        Katrina in September 2005. Future expectations for personal finances
        remain low, with only one in three consumers (33 per cent) expecting
        their personal finances to be stronger in six months. However, this
        was offset slightly by an increase in the number of consumers who
        think their local economy will be better in six months (23 per cent
        in February, versus 19 per cent in January).

    -   Americans' muted view of their prospects is reflected in their
        attitude towards making investments or major purchases. The RBC
        Investment Index declined more than 13 points to this month, to 62.6,
        down sharply from 76.3 in January. Consumers are less confident about
        making investments, with more than half (52 per cent) saying they are
        less confident about investing for the future, versus 48 per cent in
        January. In addition, only 22 per cent of consumers say they are more
        comfortable today making a major purchase, such as a house or car,
        compared to 28 per cent in January. One seeming inconsistency
        actually underscores the loss of consumer confidence: Two in
        five consumers (41 per cent) think that the next 30 days will be a
        good time to buy real estate, up from 36 per cent in January. This is
        likely because consumers think that a soft housing market offers
        bargains, even if they themselves are reluctant to buy.

    -   The RBC Jobs Index for February stands at 101.3, compared to 106.9 in
        January. Despite the decline, which drops confidence in job security
        to the lowest level since September 2003, Americans' confidence in
        their jobs remains comparatively strong. The decline was fed by an
        increase in the number of consumers who expect that they or someone
        they know personally will lose their job in the next six months, to
        24 per cent in February from 18 per cent in January.

    The complete RBC CASH Index report for February 2008 can be viewed at:

    About RBC

    RBC (RY on TSX and NYSE) is Canada's largest bank as measured by assets
and market capitalization and one of North America's leading diversified
financial services companies. In the United States, RBC provides personal and
commercial banking, wealth management, insurance, corporate and investment
banking and transaction processing services to about two million clients
through RBC Centura, RBC Insurance, RBC Liberty Insurance, RBC Dain Rauscher
and RBC Capital Markets. The company employs approximately 70,000 full- and
part-time employees who serve more than 15 million personal, business, public
sector and institutional clients throughout offices in North America and
36 countries around the world. For more information, please visit

For further information:

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

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