Consumer Confidence Improves
Rising investment confidence and expectations for the future pushed consumer confidence north in August, according to the RBC CASH Index. Overall, consumer confidence advanced 15.1 points, bringing the RBC CASH Index to 37.5 in August, versus 22.4 in July.
“The RBC Index for August showed a strong bounce in overall confidence but, as the relatively low readings in the sub-indices show, the economic recovery continues to face a number of headwinds, particularly in the job market,” said Tim Porcelli, an economist for RBC Capital Markets (New York). “On that front, the RBC Jobs Index remains at a relatively low level and suggests a continued difficult labor backdrop to any recovery.”
Simultaneously, the American Customer Satisfaction Index continued to climb, registering a second straight quarterly improvement after a period of decline preceding the recession, according to a report by the University of (Ann Arbor) Michigan, which tracks the index.
“Stock prices have been rising, real estate is showing signs of life, consumer confidence is up, corporate earnings are mixed but generally better than expectations and inventories are becoming more in line with demand and, above all, consumer spending rebounded in the first quarter,” said Claes Fornell, ACSI founder. “It is too early to predict whether the recession has bottomed out, but since ACSI is usually a precursor to increasing consumer demand, it could very well be signaling a revival for a very depressed U.S. economy.” [October 2009 PET AGE]
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