RBC Consumer Attitudes and Spending by Households index, measuring U.S. consumer confidence, jumps 19.3 points to 58.3 in January from December, its highest level since September 2008
Cindy Allen
NEW YORK
,
January 19, 2010
(press release)
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After declining throughout much of 2009, American consumer confidence improved sharply this month, returning to levels not seen since the financial crisis began in September 2008, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index. Driven by the largest-single-month gain in expectations for jobs since the inception of the Index eight years ago, the RBC Index for January 2010 stands at 58.3, up 19.3 points from its December 2009 reading of 39.0.
“This month’s RBC Index has risen to levels not seen since the financial crisis hit with full force,” said RBC Capital Markets U.S. economist Tom Porcelli. “The latest increase seems to be based on the recent string of positive economic news. This bodes well for continued improvement in consumer confidence, which will be crucial to economic recovery.”
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 1,002 U.S. adults polled from January 7-10, 2010, by survey-based research company Ipsos Public Affairs. The margin of error was ±3.1 percent.
Highlights of the survey results include:
* Americans' confidence in the job market improved dramatically this month, as evidenced by a 16.5 point increase in the RBC Jobs Index to 67.9 - the largest single-month gain ever observed in the Index. Declining job losses correspond with consumers' sense of job security - according to the Index, 30 percent of consumers feel more confident about their jobs. Likewise, concern that job losses are looming has declined over the last month. Personal job loss experience improved in January, with 62 percent of consumers reporting job loss in their immediate circle, compared to the high of 71 percent in December.
* Consumers' economic outlook also brightened considerably this month, sending the RBC Expectations Index to 67.6, up 27.2 points from December's level of 40.4 and the highest level since September 2008. An increase in consumer's expectations for both their local economies and their personal finances coupled with gains in job security resulted in the overall Expectations Index improving. Currently, 38 percent of consumers believe the economy in their community will be stronger six months from now (compared to 35 percent last month), while only 15 percent believe it will continue to weaken (compared to 19 percent in December.)
* Fueled by a striking increase in consumer optimism, the RBC Current Conditions Index also reached a 15-month high in January as it climbed to 51.6, up 14.6 points from last month's reading of 37.0. The percentage of consumers rating their personal financial situation as strong increased to 25 percent this month from 21 percent in December. The share of Americans' rating their personal financial situation as weak held steady at 32 percent, the same reading as in December.
* Mirroring the improvement in the overall index and the current conditions index, the RBC Investment Index advanced 11.2 points this month to 58.1, compared to December's 46.9 level. Consumers who feel confident about investing for the future held steady in January at 33 percent more confident, compared to 35 percent in December. Consumer comfort levels for investing in the stock market also edged up, with 37 percent saying that now is a good time to invest in the stock market, compared to 32 percent in December. Americans are also feeling more confident about investing in real estate. In January, 44 percent of consumers said they believe the next month will be a good time to buy real estate, compared to only 41 percent last month.
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.
Director
Ipsos Public Affairs
(202) 463-7300
publicaffairs@ipsos-na.com
About Ipsos
Ipsos is a leading global survey-based market research company, owned and managed by research professionals that helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world. Member companies assess market potential and interpret market trends to develop and test emergent or existing products or services, and build brands. They also test advertising and study audience responses to various media, and measure public opinion around the globe.
They help clients create long-term relationships with their customers, stakeholders or other constituencies. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting and offers a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999.
In 2008, Ipsos generated global revenues of €979.3 million ($1.34 billion U.S.).Visit www.ipsos.com to learn more about Ipsos offerings and capabilities.
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.
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