Consumer Confidence Seems to Recover
A recently released poll shows that consumer confidence took a rebound in November according to the Associated Press. The RBC CASH Index showed an upward trend starting in September at 61.5 to October at 66.8 to November’s poll numbers at 81, almost a 20-point increase in two months.
The RBS CASH (Consumer Attitudes and Spending by Household) Index started at 100 in January 2002 according to a prepared statement. The monthly results are obtained in phone interviews with 1,000 individuals located across the United States. Items queried include the current and future state of local economies, savings, and personal finance situations.
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September’s numbers were the lowest since early March 2003, when the news of the time was dominated with war news. The Associated Press reports that the low numbers over September and October reflect the disasters Hurricanes Katrina and Rita visited on the Gulf Coast and rising energy prices and interest rates.
“The fact that prices have come down makes people feel better and they think the future looks better,” said Bill Cheney, John Hancock Financial Services’ chief economist.
Lynn Reaser, chief economist at Bank of America’s Investment Strategies Group, concurs telling the Associated Press, “Consumers seem to have rebounded from the low point of spirits this year reached right after the hurricanes struck but they are still somewhat anxious about the energy situation and how they will fare in the coming months.”
Consumer spending may be soft in the fourth quarter according to analysts but expect gains elsewhere in the economy to allow the economy to grow at about 3 percent, according to the Associated Press.
The RBC Jobs Index continued a strong showing with a 119.8 for this month, practically tying the results for June and October this year according to a prepared statement.
In other survey news, a Federal Reserve report shows U.S. consumer credit in September dropped for the first time since November 2004, by $59.4 million. Analysts expected a rise of $6 billion in September according to Reuters. The Fed said this was one of four monthly declines since September 1998. The report also showed that non-revolving credit in September decreased by $3.20 billion while revolving credit gained $3.14 billion.
“American consumers have had to contend with some unsettling developments in recent months, certainly enough to dampen their expectations about future economic conditions; but the rebound in those expectations speaks to the underlying strength of the economy," RBC Dain Rauscher’s chief economist, Vince Boberski, said in a prepared statement. "That’s good news for everyone, but particularly businesses that rely on strong sales during the holiday season.”