More than half of consumers say country is now on the right track
NEW YORK, May 7 /CNW/ - Driven by reduced concern about current economic
conditions and diminishing fears of job loss, U.S. consumer sentiment
continued to rebound this month, 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 43.0 for May 2009, up from 38.3 in April
and from 1.6 in February, its all-time low. This is the first three-month
rally for the Index since the last quarter of 2005.
"Better-than-expected news about the economy and corporate earnings is
helping consumers to recognize that the worst is behind us," said RBC Capital
Markets Managing Director Larry Miller. "Their growing confidence is seen in
the continued improvement of the RBC Jobs Index, which suggests that consumers
have less fear of losing their jobs. That may lead to a revival in spending,
further driving economic recovery."
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 1-5, 2009, by survey-based research company Ipsos Public Affairs. The
margin of error was +/-3.1 per cent for all respondents.
Highlights of the survey results include:
- The RBC Jobs Index saw a rise of 9.2 points in May to 54.4, compared
to 45.2 last month, the second consecutive increase in the Jobs Index
following six straight months of declines. Typically, declines in the
feeling of job security follow real experiences in job loss, but this
time confidence is improving even while unemployment is still growing
nationally. Expectations for future employment show the strongest
improvement: Thirty-two per cent of consumers say it is likely that
they or someone in their family or friends will lose their job in the
next six months, down from 42 per cent in February.
- The RBC Expectations Index showed little change in May, holding at
34.0, up 1.6 points from the 32.4 observed in April. Currently, 36
per cent of consumers believe the economy in their community will be
stronger in the next month, while only 20 per cent believe it will
continue to weaken, roughly the same split as in April.
- The RBC Current Conditions Index currently stands at 45.0, up 9.2
points from last month's 35.8. Consumers' confidence in both their
local economy and their personal finances continued to show small
improvements in May. The share of consumers who say that their
personal financial situation is strong rose slightly this month, to
25 per cent, compared to 23 per cent in April.
- The RBC Investment Index currently stands at 49.6, up 4.8 points from
April's 44.8. While most of the increase in investment confidence
stems from improvements in respondents' personal financial condition,
consumers are also showing growing comfort with investment and major
spending. The number of consumers who say they are confident about
investing for the future edged up to 28 per cent this month, up from
24 per cent last month.
"Consumers aren't ready to celebrate, but they clearly are regaining
confidence in the economy and their own personal prospects. That is important,
because genuine economic recovery will be the result of millions of Americans
having enough confidence to get off the sidelines and start spending and
investing again," said Miller.
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