RBC CASH Index: U.S. consumer confidence heats up again in March
New York, NY - Consumer confidence levels rallied this month after taking a tumble in February, according to the RBC CASH (Consumer Attitudes and Spending by Household) Index. Buoyed by consumers' upbeat evaluations of their current economic condition and their positive outlook for the job market, the RBC Index for March stands at 58.2, an 18.8 point increase from February's 39.4 reading.
"The volatile results of the RBC Index in recent months underscore just how fragile consumer confidence has been since the recession began," said RBC Capital Markets U.S. economist Tom Porcelli. "In spite of statistical indicators showing that the recession is over, many consumers do not yet see evidence of a strong recovery in their own lives and are unsure of what to believe. We are unlikely to see a consistent upward trend until consumers are convinced that a solid recovery is in place."
The RBC 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 February 26 - March 1, 2010, by survey-based research company Ipsos Public Affairs. The margin of error was ±3.1 per cent.
Highlights of the survey results include:
- Americans' attitudes about current conditions soared in March, increasing 26.2 points and bringing the RBC Current Conditions Index to 56.7, the highest level since May 2008. Consumers reported renewed optimism in their personal financial situation and their purchasing power. The share of consumers who say that their personal financial situation is strong, rose to 25 per cent this month, compared to 21 per cent in February.
- The RBC Investment Index increased sharply this month, climbing 24.3 points to 65.1 - the highest mark for the Index since January 2008. The increase in investment confidence stems from respondents' diminished fears about their ability to save and improved personal financial considerations. Americans who report they feel less confident in their ability to make investments for the future dropped to 52 per cent, down from 57 per cent in February.
- The RBC Jobs Index also rallied in March, increasing 13.3 points to 68.2, the strongest reading for the Index since November 2008. Americans reporting personal job losses declined significantly, with 61 per cent saying that they or someone they know have lost their job as the result of economic conditions (compared to 67 per cent in February). Perceptions of job security also improved this month, with 32 per cent of consumers reporting more confidence in their job security compared to six months ago (versus February's 28 per cent).
- While significantly brighter than a year ago when RBC Expectations Index was in negative territory, consumers' near-term economic outlook continues to be volatile, showing a small upswing in March following considerable changes in January and February. The Index currently stands at 57.3, up 9.3 points from February's level of 48.0. Currently, one-in-10 consumers (10 per cent) say their personal finances will be weaker in six months, compared to 13 per cent in February, and one-third (33 per cent) believe their finances will strengthen in the near future. The share of consumers who believe the economy will be weaker six months from now held steady at 16 per cent.
The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.
For more information on this release, please contact:
Michael Gross, Ph.D.
Ipsos Public Affairs
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About RBC Financial Group
Royal Bank of Canada (TSX, NYSE: RY) uses the initials RBC as a prefix for its businesses and operating subsidiaries, which operate under the master brand name of RBC Financial Group. Royal Bank of Canada is Canada’s largest bank as measured by assets, and is one of North America’s leading diversified financial services companies. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services on a global basis. The company employs approximately 60,000 people who serve more than 14 million personal, business and public sector clients through offices in North America and some 30 countries around the world. For more information, please visit www.rbc.com.