NEW YORK, Nov. 13 /PRNewswire-FirstCall/ -- Although energy prices have declined sharply, consumer sentiment remains under siege due to persistent negative forces ranging from the escalating job crisis to the prolonged housing debacle and the growing credit crunch, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index. Consumer confidence held steady in November, slipping only 2.3 points. Despite the overall outlook remaining gloomy, Americans' economic expectations for the future increased significantly. As a result, the RBC CASH Index currently stands at 34.7, compared to 37.0 in October.
"The overall RBC CASH Index continues to sag back towards the low established in July when sentiment was driven down by record energy prices. Although we have had a sharp decline in energy prices, consumer sentiment remains low as growing joblessness, the decline in the stock market and the ongoing housing market correction weigh on consumers' minds," said T.J. Marta, Economic and Fixed Income strategist for RBC Capital Markets. One positive sign is that the expectations subcomponent has climbed, likely reflecting optimism over the Presidential election, declining energy prices and the sweeping actions taken by the government to buoy the economy and financial system." 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 November 6 - 9, 2008, by survey-based research company Ipsos Public Affairs. The margin of error was +/-3.1 per cent.
Highlights of the survey results include: - The RBC Expectations Index rebounded this month, increasing
18.2 points to 23.3, compared to 5.1 in October. Expectations
regarding the health of the local economy improved in November as
one-third of Americans (34 per cent) believe their local economy will
be stronger six months from now, compared to only 31 per cent in
October. In addition, the proportion of consumers who expect their
local economy to be weaker in six months dropped from 27 per cent
last month to 24 per cent in November. The 10 per cent gap between
"stronger" and "weaker" perceptions this month, compared to the four
per cent gap in October, contributed to the increase in the RBC
Expectations Index for November.
- The RBC Jobs Index for November stands at 74.0, compared to 78.8 last
month. Americans are the most pessimistic they have been about jobs
since the inception of the RBC Jobs Index in January 2002. Consumers' jitters were fed by an increase in job loss experience. This month, nearly half of Americans (48 per cent) report having
experienced job loss, either personally or in their close circle,
compared to 41 per cent in October.
- The RBC Current Conditions Index dropped 12.4 points to a
25.6 reading, compared to 38.0 in October. The decline in the index
is primarily driven by consumers' worries about their current
financial situation and an incremental downward shift in their
attitudes about the current strength of their local economy. Currently, one-third (33 per cent) of consumers view their current
financial situations as weak, up from 29 per cent in October, while
only 21 per cent view it as strong, down from 25 per cent last month.
- Consumers' discomfort with purchasing, investing and saving is also
driving down the RBC Investment Index. After dropping 12.2 points
this month, the RBC Investment Index stands at 34.8, compared to 47.0
in October. Americans are also more cautious regarding purchases. Seven out of ten (71 per cent) consumers report they are less
confident in making a major purchase such as a home or car, compared
to 69 per cent last month.
The entire RBC CASH Index report can be viewed at:
http://www.rbc.com/newsroom/rbc-cash-index.html. Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name of RBC. We are Canadas largest bank as measured by assets and market capitalization and one of North Americas leading diversified financial services companies. We provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. We employ approximately 75,000 full- and part-time employees who serve more than 17 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 46 other countries. For more information, please visit http://www.rbc.com/. DATASOURCE: RBC CONTACT: Loretta A. Healy, The Hubbell Group, Inc., (781) 878-8882; Kevin Foster, RBC Capital Markets, (212) 428-6902
|