Deliver Your News to the World

Consumer confidence dips to six-month low, according to RBC CASH Index


Americans’ economic enthusiasm continued to erode, hitting a six-month low heading into the second quarter, 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 that overall consumer sentiment decreased by nearly seven points in April, driven by declines in all facets of consumer attitudes. As a result, the RBC CASH Index, released today by RBC, stands at 85.4, compared to 92.3 in March.

“The decline in consumer confidence to its lowest level since October is consistent with the increasing price of gasoline, rising mortgage rates and continuing headlines about the housing correction,” said T. J. Marta, Economic and Fixed Income Strategist for RBC Capital Markets. “Overall, the across-the-board downturn may indicate further erosion of economic confidence in coming months, especially if gas prices continue to increase.”

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 April 2-4, 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:

Negative views of the current state of the economy continue to outweigh positive views, with more than one-quarter of Americans (27 per cent) rating their local economy as weak, and slightly more than one-fifth (22 per cent) rating their local economy as strong. The RBC Current Conditions Index dropped to 99.0 in April from 107.5 last month.

Consumers’ confidence in the future weakened again this month as the RBC Expectations Index decreased nearly eight points to 41.7, down from 49.3 in March. While nearly one in four consumers (23 per cent) continue to believe their local economy will be stronger six months from now (compared to 24 per cent in March), perceptions that the local economy will be weaker in six months increased an additional two points this month to 19 per cent, which is nearly double the response (11 per cent) in February.

Americans’ attitudes toward making major purchases (such as a home or car) also waned again in April as half of respondents (48 per cent) report they are currently less comfortable making a major purchase than they were six months ago, compared to 44 per cent last month.

Although consumers’ views of both the current economy and their future prospects are darkening, their overall opinions regarding investing basically held steady this month. The RBC Investment Index stands at 92.3, down from 96.4 in March, as consumers who reported a “weak” rating of their personal financial situation increased two points, to 26 per cent, and those who reported greater confidence in their ability to save and invest in the future dipped one point, to 41 per cent.

Despite a slight overall decline, Americans’ confidence regarding job security remained the strongest facet of consumer sentiment this month. The RBC Jobs Index for April stands at 126.4, compared to 128.4 in March. Confidence about personal job security slipped somewhat, with 39 per cent of Americans saying they are less confident about job security than they were six months ago (versus 35 per cent in March).
The entire RBC CASH Index report can be viewed at:


This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.