RBC CASH Index Says U.S. Consumers Feeling Better on All Fronts
With oil prices falling and a presidential election in less than two months, U.S. consumer confidence may be heating up, says a monthly survey from RBC on Thursday. The index has advanced for two consecutive months, including major boosts in each of the three subcomponents in September.
The consumer attitudes and spending by household (CASH) index from RBC showed that consumer confidence climbed 35 points to stand at 69.2 in September, compared to 33.8 in August. Gains were made in every facet of consumer sentiment, including assessments of current conditions, investing and job security.
"The dramatic rebound in consumer sentiment this month is as startling as some of the developments in recent weeks," said T.J. Marta, fixed income strategist at RBC Capital Markets.
The expectations component rebounded out of negative territory by a whopping 81 points in September, bouncing from -4.7 to a +76.3 reading.
The current conditions index "improved markedly" to 55.2, up from 36.7 in August, and the investment component increased to 63.8 from a previous 42.6 reading.
"The prices of oil and gasoline are down 30 per cent and 12 per cent, respectively, from their peaks in July. The bailouts of Fannie Mae and Freddie Mac announced during the polling period represent a sweeping and historic move, which many hope will significantly mitigate the housing correction," Marta said.
"In addition, this month's survey occurred immediately after the Republican convention and just a week following the Democratic convention, both of which have generated hope for change in Washington."
The RBC CASH index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal financial situations, savings and confidence to make large investments. The survey began in 2002 and is released at the end of the first week of each month.
By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2008