Americans’ confidence in their future personal financial situation is weakening, but attitudes about current economic conditions and investments – though low – have stabilized, according to a monthly national survey by Ipsos Public Affairs.
In April, the six-year-old RBC CASH (Consumer Attitudes and Spending by Household) Index dropped to an all-time low of 29.5, down from 33.1 in March. One year ago, in April, the Index was at 85.4.
The downturn “indicates a potential retrenchment by consumers and corroborates suspicions that the economy has slipped into a recession,” said T. J. Marta, economic and fixed income strategist for RBC Capital Markets.
The RBC CASH Index is composed of four sub-indices:
RBC Expectations Index
Having already plummeted 34 points in March to -41.6, the sub-index fell nearly another seven points to -48.3, a downturn that shows the overall pessimism consumers have regarding a quick economic recovery.
One in five consumers (22%) say their personal finances will be weaker six months from now (15% said so in February).
RBC Current Conditions Index
The sub-index held steady at 54.6, compared with 54.7 in March.
Americans’ negative views of the current state of their local economy dramatically outweighed positive views:
- Four in ten consumers (41%) rated their local economy as “weak,” and just 15% rated it “strong.”
- One in four (25%) of those surveyed rated personal finances as “strong,” and 31% rated them as “weak” – both figures relatively unchanged from March.
RBC Investment Index
The sub-index hit the lowest level (56.4) since the CASH Index was created in 2002.
The next 30 days is a bad time to invest in the stock market (said 67% of respondents, compared with 65% in March) and in real estate (said 60%, compared with 62% last month).
RBC Jobs Index
The sub-index reached its lowest level in four years: 97.0 in April, down from 99.2, as more Americans (40% vs. 36% in March) reported job loss in their immediate circle.
About the RBC CASH Index: Ipsos Public Affairs polled a representative nationwide sample of 1,005 US adults from April 7-9, 2008. The Index is benchmarked to a baseline of 100 assigned at its introduction in Jan’ 02.