American consumer confidence rose sharply earlier this month to the highest level it has been at since September 2008, according to the RBC Consumer Attitudes and Spending by Household Index. In fact, the index was boosted by the largest single month gain in job expectations since the index was created eight years ago.
The RBC index for January hit 58.3, a gain of 19.3 points from its December 2009 reading of 39.0.
“This month’s RBC index has risen to levels not seen since the financial crisis hit with full force,” said RBC Capital Markets U.S. Economist Tom Porcelli. “The latest increase seems to be based on the recent string of positive economic news. This bodes well for continued improvement in consumer confidence, which will be crucial to economic recovery.”
This month’s index was based on a nationwide poll of 1,002 adults Jan. 7-10 and is comprised of four sub-indexes covering: current conditions, expectations, investing and jobs. The index is benchmarked to a baseline of 100 assigned at its introduction in January 2002.
Job confidence rose to 67.9 in January, a 16.5 point increase from December. RBC found that 30% of consumers feel more confident about their jobs.
Consumers’ economic outlook also brightened considerably this month, sending the expectations index to 67.6, up 27.2 points from December’s level of 40.4, reaching the highest level since September 2008. Accordingly, 38% said the economy in their community is likely to be stronger six months from now, up from 35% who believed this last month.
Fueled by a striking increase in consumer optimism, the current conditions index also reached a 15-month high in January, as it climbed to 51.6, up 14.6 points from last month’s reading of 37.0.
As well, the investment index advanced 11.2 points to 58.1, from 46.9 in December. Thirty-seven percent said now is a good time to invest in the stock market, up from 32% in December. And 44% said real estate makes sense as an investment right now, up from 41% last month.