Southeastern Consumer Confidence Slow to Recover
RALEIGH, N.C. – Jan. 14, 2010 – In the aftermath of the sharpest economic downturn in a generation, consumer confidence has been slow to recover. However, Southeastern attitudes, which are typically more positive than the rest of the nation, show to be particularly hard hit over the past six months, standing lower in along the southeastern seaboard than seen in the country as a whole., according to the RBC Southeastern CASH Index (Consumer Attitudes and Spending by Household) commissioned by RBC Bank, which compiles data for the six U.S. southeastern states of North and South Carolina, Georgia, Florida, Alabama and Virginia.
The RBC CASH Index is a mathematical model of American consumer confidence based on the responses to ten questions regarding confidence in personal finances, the local economy and job security. The scores are calculated to a baseline of 100 based on the prevailing consumer confidence when the study was launched in 2002. The CASH Index scores should be read as relative to previous scores allowing the reader to tell if confidence has “gained” or “declined” over a period of time.
The RBC CASH Index in the Southeast for the period of July through December of 2009 stands at 31.1 -- lower than the 37.4 seen nationwide. Consumers in Florida and South Carolina are most concerned with personal finances; Georgians are least comfortable with making investments; consumers in Alabama and North Carolina are most worried that their communities will continue to weaken; and Virginians are most optimistic about job stability.
The national measure for the single month of January (interviews from January 7-10, 2010) is now 58.3, which increased by 19.3 points in a month-over-month comparison. This is the highest level of consumer confidence observed in over a year (since the 69.2 of Sept 2008). Consumer confidence shows improvement across the board with the most pronounced gains in consumer expectations and job security.
“While stock prices have rebounded from their March lows and signs are hopeful that the recession ended over the summer, the labor market is only slowly healing. Workers are still fearful for their jobs as net job formation has not yet turned positive,” said Joe Keating, RBC Bank Chief Investment Officer. “The recent lengthening of the average workweek and the rise in the number of temporary workers are hopeful signs that the jobs market will improve in early 2010, which will boost consumer confidence.”
Other RBC Southeastern CASH Index findings include:
“It’s clear that it will take some time for consumer confidence to recover,” said Reggie Davis, RBC Bank president. “We know our clients need peace of mind, and as part of one of the largest and most stable financial institutions in the world, RBC Bank is proud to be able to truly focus on helping our clients create what’s important to them. We’re thrilled to be based and invested in the Southeast as it is a great place to live, work and do business.”
The RBC CASH Index is a composite measure of national consumer attitudes toward the state of local economies, personal financial situations, savings and investment, and job security. The recent six-month analysis includes a focused look at the Southeast where RBC Bank serves clients through its retail and commercial banking network.
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