Despite mounting job losses and a third of Americans who rate their personal finances as “weak,” consumer confidence edged up slightly this month, according to March results of the RBC CASH (Consumer Attitudes and Spending by Household) Index.
The survey found that consumer sentiment remained very low, but stable. As a result, the overall RBC CASH Index stands at 8.2 for March 2009, up slightly from 1.6 in February, the lowest level on record since the Index began in 2002.
The RBC CASH Index is composed of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index; and, RBC Jobs Index.
Highlights of the specific sub-indices:
- The RBC Current Conditions Index rallied to 14.8, up 13.2 points compared with February’s 1.6 record-low level. Currently, 35% of Americans rate their personal finances as weak, down from 39% last month. Consumers’ evaluations of the current state of their local economy also improved this month as nearly half of Americans (48%) rate their local economy as weak, down from 54% in February.
- Consumers’ overall opinions regarding investing also edged up this month. The RBC Investment Index, which was at 17.6 in February, currently stands at 24.6. Most of the increase in investment confidence stems from improvements in consumers’ financial conditions, although consumers are still anxious. Moreover, despite the plunge in the value of the stock market, the number of Americans who believe it is a “bad time” to invest in the stock market held steady at 70% this month.
- With unemployment rates creeping to their highest levels in 20 years, the RBC Jobs Index dropped to an all-time low of 40.8, down from 42.3 in February. The decline in American’s job security confidence is led by real experiences in job loss. Nearly two-thirds (64%) of Americans say that they or someone in their close circle has lost their job in the past six months because of the economy, up from 62% last month.
- Although still in negative territory, the RBC Expectations Index held steady in March, ticking up just 2.2 points to – 25.9, up from – 28.1 last month. This month, 31% of Americans say they expect their personal financial situation to improve over the next six months, a decrease from 33% in February. Confidence in the recovery of local economies is more mixed; 30% of consumers believe the local economy will strengthen in the next six months, nearly one in four (38%) believe it will stay about the same and 30% believe it will weaken.
“Consumer confidence looks to be trying to find a bottom,” said Larry Miller, managing director, RBC Capital Markets. “The March improvement taken together with the stabilization of spending intentions we’ve seen in our restaurant and other consumer surveys and in the Institute for Supply Management (ISM) may suggest the consumer has dialed back its spending to a level that is reflective of the current macroeconomic realities. Holding these levels will be key to restoring investor confidence.”
About the research: The RBC Cash Index is based on a monthly survey that measures the attitudes of Americans each month. 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 US adults polled from March 5-9, 2009, by survey-based research company Ipsos Public Affairs.