The economy may not have bounced back, but consumer confidence is on the upswing.
Royal Bank of Canada released its Consumer Attitudes and Spending by Household Index, revealing that despite declining in the fall, consumer confidence jumped in the past month to twice what it was one year ago. This confidence was driven by optimistic expectations for the near-term economic future. The RBC Index for December 2009 stands at 39.0, up 8 points from November’s 30.2 reading. A year ago, in December 2008, the RBC Index stood at 15.3.
The RBC Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance, savings and confidence to make large investments. The survey is based on 1,002 U.S. adults polled from Dec. 3 to Dec. 6, 2009, by research company Ipsos Public Affairs.
“Traditionally, the holidays are a season of hope and optimism,” explained RBC Capital Markets U.S. Economist Tom Porcelli. “Despite continuing high unemployment and weak assessments of personal finances, the RBC Index shows that American consumers are optimistic that the economy will soon begin to improve.”
Yet, overall consumer confidence is still low and vulnerable to negative news, which may put consumer confidence on a rollercoaster ride in the near- to medium-term. The percent of consumers rating their personal financial situation as “weak” remains at around one-third of respondents, while only 21% rate their current personal finances as strong.
The RBC Jobs Index for December increased 0.5 points to stand at 51.4, up from 50.9 in November. Sixty two percent report they are less confident about job security, down from 66% in November. This is despite the fact that more Americans said they or someone in their close circle has lost a job in the last six months.