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Now a Sharp Drop for US Consumer Confidence
US consumer confidence fell to the lowest level since October 2003, according to the RBC Consumer Attitudes and Spending by Household (CASH) Index conducted by Ipsos. The decline is thought to be the result of worries about gas prices, job security and terrorism.
The 1,000 respondents surveyed this week showed increasing pessimism about the current and future states of local economies, job security, and investment. The CASH Index stands at 73.9, down from 84.0 one month ago. This leaves consumer confidence at the lowest level since October 2003, when the index stood at 74.4.
These findings follow last month's more optimistic survey from the Conference Board, which reported that US consumer confidence had picked up momentum in June. However, Lynn Franco, Director of The Conference Board's Consumer Research Center, said at the time that June's confidence levels may be hard to sustain given the rise in oil prices.
'The fall in the CASH Index should make investors somewhat cautious about recent reports of solid retail sales,' said Vince Boberski, Director of Fixed Income Research at RBC Dain Rauscher. 'Of course, what people say and what they do can be two different things. The real question going forward becomes whether the lingering effects of the London bombings outweigh slightly cheaper oil, continued spending on big-ticket items, and steady wage gains.'
The Royal Bank of Canada (RBC) is online at www.rbc.com . Ipsos, which conducted the survey for RBC, is online at www.ipsos.com
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