Midwesterners more pessimistic about economy than national average, according to RBC Midwest CASH Index
* RBC Midwest Topline results (pdf, 8 pages, 72kB): rbc.com/newsroom/pdf/20060720cash-july-RBC-Midwest-Topline-results.pdf
MINNEAPOLIS, Minn. (July 20, 2006) — While Americans’ attitudes about the future direction of the economy are largely holding steady, amid rising oil prices and Middle East unrest, Midwesterners have a more pessimistic outlook than consumers in other parts of the United States, according to the July 2006 results of the RBC Midwest CASH (Consumer Attitudes and Spending by Household) Index, which measured the attitudes of 1,000 Americans last week. Results of the RBC Midwest CASH Index stand at 76.0 compared to 80.1 nationwide.
The RBC Midwest Current Conditions Index for July stands at 91.9, below the 96.6 observed nationally. This difference is largely due to Midwestern concerns about the current state of the local economy. In the Midwest, fewer than one in five (16 percent) rate their current local economy as strong, compared to nearly one quarter (23 percent) nationally who rate the economy similarly. Consumers in Minnesota, Illinois and Wisconsin are slightly more optimistic with regard to the local economy, with 20 percent rating the local economy as strong - significantly higher than the Midwest overall, but still below national confidence levels.
In addition, overall attitudes regarding expectations for local economies were lower in the Midwest than the national average. The RBC Midwest Expectations Index for July stands at 28.9 compared to 34.2 nationally. Overall attitudes regarding expectations for local economies were lower in the Midwest. Only one in five (20 percent) expect the local economy to be stronger six months from now, compared to 24 percent nationally who feel similarly. The most significant difference accounting for lower expectations in the Midwest lies in forward-looking expectations about personal financial health. In the Midwest, fewer than one third (29 percent) feel their personal financial situation will be stronger six months from now, compared to the nearly four in ten (37 percent) nationally who believe their personal finances will be stronger in six months.
“While consumer confidence across the nation has remained stable, despite record energy prices and increasing Middle East tensions, consumers in the Midwest are more cautious about their outlook for the future,” said Janet Engels, private client research group director, RBC Dain Rauscher. “The stock market continues to be volatile, however investment opportunities still exist. Consumer attitudes appear to reflect this sentiment.”
* According to the survey, 40 percent of Midwesterners report that they are more confident in their ability to invest in the future, consistent with levels observed nationally.
* In addition, when looking at other measures of investing, Midwesterners are not significantly different from consumers nationally when thinking about whether the next 30 days will be a good time to buy real estate. Roughly one third (35 percent nationally, 34 percent in the Midwest) believe the next month will be a good time to purchase real estate. However, Midwest residents are slightly more cautious when thinking about investing in the stock market.
* In the Midwest, consumer confidence regarding job security was consistent with national attitudes in July 2006, with the RBC Midwest Jobs Index standing at 116.7 (116.9 nationally). Confidence in job security is slightly higher in the Midwest, although not statistically different. In the Midwest, 39 percent are more confident about their job security than six months ago (compared to 36 percent more confident nationally).
About The RBC Midwest CASH Index
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-indexes; 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 for the RBC Midwest CASH Index are based on a representative nationwide sample of 1,000 adults nationwide and 824 adults in the Midwest (encompassing IA, IL, IN, OH, MI, MN, ND, SD, WI), polled from July 10-13, 2006 by survey-based research company Ipsos Public Affairs. The margin of error was plus or minus 3.1 percent.
About RBC Dain Rauscher
RBC Dain Rauscher Inc., a wholly owned subsidiary of Royal Bank of Canada (RY: TSX, NYSE), is one of the nation’s largest full-service securities firms. The company serves individual investors and businesses through offices coast to coast, and capital markets and correspondent clients in select U.S. and international markets. Founded in 1909, RBC Dain Rauscher is a member of the New York Stock Exchange and other major securities exchanges, as well as the Securities Investor Protection Corp.
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