"Consumer confidence fell for the second consecutive month, reaching its lowest level since last August," said T. J. Marta, Economic and Fixed Income Strategist for RBC Capital Markets. "The drop in consumer confidence appears to be driven by new concerns about the jobs market and a weaker investment outlook due to the failure of the stock market to achieve new highs during June."
Americans' pessimism about the economy now includes concerns about job losses and job security. In July, the RBC Job Index reached its lowest level in more than a year, dropping over 10 points to 116.8, compared to 126.9 in June. Personal job loss experience in July increased by 6 points, with 34 per cent of consumers reporting job loss in their immediate circle compared to 28 per cent in June. Expectations regarding future job loss also increased, with nearly one in five (18 per cent) Americans reporting future job loss is likely in the next six months, compared to 14 per cent in June.
Consumers' confidence in the investment climate cooled only slightly this month, compared to the dramatic 20 point drop experienced in June. The RBC Investment Index dropped less than three points, and stands at 83.6, down from 86.1. Americans reported a small dip in their confidence in the ability to save and invest in the future with 40 per cent reporting greater confidence this month, compared to 42 per cent in June.
Expectations regarding future economic conditions also declined in July. The RBC Expectations Index hit its lowest level for the year, dropping nine points to 23.1, from its 32.2 level in June. Anxiety over prospects for the local economy increased, with 22 per cent of consumers expecting the local economy to be weaker in six months, compared to 18 per cent last month. Opinions regarding expectations for personal finances also soured, with 33 per cent of those polled reporting they believe their personal finances will be stronger six months from now, down from 36 per cent in June.
The RBC Current Conditions Index dipped slightly in July to 95.8, compared to 96.8 in June. Americans' assessments of current local economic conditions dropped this month, with 20 per cent rating their local economy as strong, compared to 25 per cent last month. Consumers' comfort level for making household purchases fell from 40 per cent in June to 36 per cent this month, while ratings of current personal finances held steady in July with slightly less than one quarter of consumers (24 per cent) rating their current financial situation as strong, compared to 23 per cent in June.
