Stock Market, Housing Woes Don't Restrain Consumer Confidence - For Now
NEW YORK, Aug. 10 /CNW/ - After sliding for most of 2007, consumers'
views about current and future economic conditions rebounded this month,
according to the most recent results of the RBC CASH (Consumer Attitudes and
Spending by Household) Index, which measured the attitudes of 1,003 Americans
earlier this week. As a result, the overall RBC CASH Index stands at 89.3 for
August 2007. This is 13 points above July's 76.1 level and its highest level
since March 2007.
The improving sentiment comes in spite of a volatile stock market that
has Wall Street calling for the Federal Reserve to calm investors, concerns
about credit, recent increases in the jobless rate and lackluster July retail
sales. Overall consumer sentiment shows a reduction in consumer pessimism
after increasing negativity in June and July. In addition to the overall
increase in consumer confidence, strong gains were made across all facets of
consumer sentiment, including assessments of current conditions, expectations
for the future, investing and job security.
"Consumer confidence rebounded this month, likely supported by ongoing
tightness in the jobs market and declines in both the price of gasoline and
mortgage rates," said T. J. Marta, Economic and Fixed Income Strategist for
RBC Capital Markets. "However, the rise in the investment index might prove
short-lived if current market volatility persist."
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 1,003 U.S. adults polled from August 6-8,
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:
- In August, the RBC Job Index rose nearly eight points to 124.5,
compared to 116.8 in July. The biggest reason for the improvement was
a decrease in personal job loss experience, with only one in three
respondents (30 per cent) reporting job losses (compared to
34 per cent last month). In addition, the share of consumers
reporting no personal job loss experience rose to 70 per cent in
August, up from 65 per cent in July.
- Consumers' confidence in the investment climate rose at a greater
rate than the small decrease experienced in July. The RBC Investment
Index climbed more than 14 points, and stands at 97.9, up from 83.6.
Forty-three per cent of consumers reported they are more confident in
their ability to invest, compared to 40 per cent in July.
- Expectations regarding future economic conditions also increased
sharply in August. The RBC Expectations Index more than doubled,
climbing to 43.9 from its 23.1 level in July, the lowest level in
2007. Expectations regarding potential future job loss improved
significantly, with 56 per cent of consumers reporting it is unlikely
they or someone they know will lose their job in the next six months
(versus 50 per cent in July). Expectations for personal finances also
- The RBC Current Conditions Index improved markedly in August to
105.6, compared to 95.8 in July. Americans' assessments of current
local economic conditions rose this month with 22 per cent rating
their local economy as strong, compared to 20 per cent last month.
Ratings of current personal finances improved slightly in August,
with one in four consumers (26 per cent) rating their current
financial situation as strong, compared to 24 per cent in July.
While overall optimism did not significantly increase, the decreases in
negative and pessimistic attitudes were substantial enough to buoy the overall
RBC CASH Index in August. However, reduced pessimism cannot sustain continued
improvements in consumer sentiment. Without increases in positive assessments,
consumer confidence could easily revert to the downward trend observed
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