"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. 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 U.S. adults polled from May 5-7, 2008, by survey-based research company Ipsos Public Affairs. The margin of error was +/-3.1 per cent.
Highlights of the survey results include:
- Consumers' economic outlook brightened this month, as evidenced by the RBC Expectations Index, which increased more than 24 points in May, but remains in negative territory for the fifth consecutive month and stands at -24.1. Currently, fewer than one-third (32 per cent) of Americans believe their local economy will be weaker in the near future, down from 38 per cent last month.
- The RBC Current Conditions Index, at 57.4, showed a slight increase when compared to the 54.6 registered last month. The increase in the index is being driven by improving attitudes toward the current state of personal finances, with 30 per cent of consumers rating personal finances as strong, compared to 25 per cent in April. Attitudes toward the current state of their local economy remained statistically unchanged in May, with 15 per cent of consumers again this month rating their local economy as strong, and 42 per cent of consumers rating their local economy as weak, compared to 41 per cent 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 per cent, compared to 28 per cent in April. Confidence in real estate investment also held steady in May. More than one-third of consumers (37 per cent) believe the next 30 days will be a good time to buy real estate, compared to 38 per cent 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 per cent) Americans reporting job loss is likely in the next six months, up from 20 per cent in April. Consumer confidence in personal job security also declined slightly this month, dipping one point to 27 per cent, compared to 28 per cent in April.
