Americans’ economic enthusiasm rallied slightly this month, increasing nearly 10 points and reversing six straight months of declining confidence, 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 consumers earlier this week, found respondents more positive about their future economic prospects, but still worried about job security.
As a result of these mixed attitudes, the overall RBC CASH Index stands at 39.0 for May, up from its previous all-time low of 29.5 in April.
“Consumers are beginning to look beyond the current economic downturn, as evidenced by the increase in their expectations for the future,” said T.J. Marta, economic and fixed income strategist for RBC Capital Markets. “The fact that Americans’ perception of the jobs environment weakened is not inconsistent with the rebound in the overall index, as the job market tends to lag the economic cycle.”
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.
Highlights of the survey results include:
- The RBC Expectations Index increased more than 24 points in May but remains in negative territory for the fifth consecutive month and stands at -24.1. Fewer than one-third (32%) of Americans say they believe that their local economy will be weaker in the near future, down from 38% last month.
- The RBC Current Conditions Index, at 57.4, slightly increased from 54.6 last month. The increase is being driven by improving attitudes toward the current state of personal finances, with 30% of consumers rating personal finances as strong, compared with 25% in April. Attitudes toward the current state of their local economy remained statistically unchanged in May, with 15% of consumers again this month rating their local economy as strong, and 42% of consumers rating their local economy as weak, compared with 41% in April.
- Americans’ attitudes toward investing improved slightly in May, increasing the level of the RBC Investments Index to 60.7, up more than four points from the 56.4 level recorded last month. Consumers reporting that the next month will be a good time to invest in the stock market held steady at 27%, compared with 28% in April. Confidence in real estate investment also held steady in May. More than one-third of consumers (37%) believe the next 30 days will be a good time to buy real estate, compared with 38% last month.
- At 93.7, the RBC Jobs Index dropped to the lowest level since the index began in January 2002. Anxiety over future job loss increased in May, with one in four (26%) Americans reporting job loss is likely in the next six months, up from 20% in April. Consumer confidence in personal job security also declined slightly this month, dipping one point to 27%, compared with 28% in April.
About the data: The RBC CASH 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 US adults polled from May 5-7, 2008, by survey-based research company Ipsos Public Affairs.