Reversing seven months of crumbling confidence, Americans' economic enthusiasm has rallied this month, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index, which has posted its first significant improvement since September 2008.
Overall consumer confidence advanced 30.1 points, bringing the RBC CASH Index to 38.3 in April, compared to 8.2 in March. Consumer sentiment was bolstered by a 58.3 point increase in Americans' expectations for the future. Americans' attitudes about current conditions and investing also increased in the past month, but they continue to worry about jobs.
"The April readings provide some evidence of a stabilisation in consumer spending," suggests Larry Miller, managing director for RBC Capital Markets. "But while stabilisation does not mean recovery, it is a far better prospect than the free-fall of late 2008. Whether this translates into an improvement in consumer spending is another question, and it is still far too early to tell."
Highlights of the survey's results included:
- The RBC Expectations Index increased 58.3 points to 32.4 from its -25.9 reading in March 2009. The shift in the index is due largely to an improvement in Americans' expectations for their local economy and personal financial situation. In April, nearly four-in-ten consumers (39%) believe their community's economy will be stronger in the next month, compared to 30% in March, while only 21% believe it will continue to weaken, compared to 30% last month. Only 13% of Americans expect their personal financial situation to weaken over the next six months, compared to 18% in March.
- The RBC Current Conditions Index improved in April to 35.8, compared to 14.8 in March. This is the second consecutive month of gains in the index and the largest month-to-month increase in current conditions since September 2006.
- Consumers' overall opinions regarding investing improved significantly, sending the RBC Investment Index to a reading of 44.8, up 20.2 points from 24.6 in March. The increase in the index is being driven by improving attitudes toward stock and real estate investments.
- After dropping for six consecutive months, the RBC Jobs Index edged up 4.4 points in April to 45.2, compared to 40.8 last month. Although consumers continue to be peppered with bad news about jobs, Americans' confidence regarding overall job security held steady, but remains very low.
The complete RBC CASH Index report has been made available via RBC's web site - click here.
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