Consumer sentiment slumps in June, resuming a downward trend, according to RBC CASH Index

    NEW YORK, June 8 /CNW/ - Americans' confidence in current economic
conditions slumped this month, resuming a downward trend after a brief
resurgence in May, according to the most recent results of the RBC CASH
(Consumer Attitudes and Spending by Household) Index. The survey, which
measured the attitudes of 1,000 Americans earlier this week, found respondents
much less confident about their current situation and only mildly optimistic
about their future prospects. As a result of these mixed views, the overall
RBC CASH Index, released today by RBC, stands at 81.4 for June 2007, six
points below May's 87.1 level.
    "In spite of continued jobs growth, U.S. consumer sentiment is weighed
down by several factors," said T. J. Marta, Economic and Fixed Income
strategist for RBC Capital Markets. "Mortgage rates have spiked to their
highest level since last July, gasoline prices remain above $3 per gallon
going into the driving season and equity prices have begun to waver after two
months of gains."
    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
June 4-6, 2007, 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' ratings of their current personal finances dropped in
        June, with less than one-quarter (23 per cent) saying their personal
        finances are "strong," down from 31 per cent in May. By comparison,
        27 per cent of consumers rate their personal finances as "weak." In
        addition, consumers said they were less comfortable making major
        purchases, such as a home or a car. The combination of these more
        negative attitudes caused the RBC Current Conditions Index to sink to
        96.8 in June, down more than 16 points from 113.2 in May.

    -   Consumers' overall opinions regarding investing also fell
        significantly this month. The RBC Investment Index stands at 86.1,
        down 21 points from May's level of 107.5. The decline is due to
        consumers' decreasing confidence in investing in the stock market and
        real estate.

    -   Although consumers feel much less positively about the present, their
        confidence in future economic conditions improved slightly this
        month, breaking a four-month string of declining expectations about
        the future. The strengthened opinions of future conditions produced
        an increase in the RBC Expectations Index, which rose nearly eight
        points to 32.2, up from 24.3 in May.

    -   Confidence in job security remained the strongest facet of consumer
        sentiment this month. The RBC Jobs Index for June stands at 126.9, up
        slightly from 123.8 in May. Just 14 per cent of consumers expect that
        they or someone they know will lose their jobs in the next six
        months, down from 18 per cent in May.

    "Consumers' weakening confidence in current conditions and their
investing prospects are consistent with the fact that just one in five
Americans thinks that the country is headed in the right direction," added
Marta. "While consumers are optimistic about the future and their personal job
security, the return to declining overall consumer confidence at the start of
summer may be particularly troubling for the travel industry and retailers
that rely on vacationers for a significant part of their annual business."
    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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