The telephone survey of 1,000 individuals, taken shortly after the devastating hurricane, found plummeting confidence in local economic expectations. The RBC Expectations Index fell from 32.2 in August to -13.5 in September, the first time the index has been in negative territory. The index was 79.6 in January.

“It is clear that constant pain at the pump as well as relentless images of Katrina’s aftermath are taking their toll on the public,” said Vince Boberski, chief economist for RBC Dain Rauscher (Washington).

The falling expectations index helped drag down the overall index. The RBC CASH Index was 61.5 for September, down from a high of 104.8 in August 2004.

However, other parts of the survey showed continued consumer confidence. Opinions about the current strength of local economies generated a rating of 92, up from 85.5. Furthermore, more than one-quarter of Americans (28 percent) rated their current finances as strong in September, compared with 24 percent in July and 21 percent in August.

They also viewed investing more positively in September. The RBC Investment Index stood at 80.7, up from 78.2 in August.

“Consumers have been feeling queasy about the future since the economic expansion began,” Boberski said. “The CASH Index stands at a 22-month low even as it has become easier to find jobs. The uncertainty will likely turn around once rebuilding begins and gas prices fall further, but it’s clear that it is going to take time.”

The 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 index is benchmarked to the 100 reading assigned in January 2002, when the index was first introduced. September’s findings were based on a representative sample of 1,000 adults polled nationwide Sept. 6-8 by survey-based research company Ipsos Public Affairs (Washington).

According to the U.S. Commerce Department, Hurricane Katrina had minimal impact on retail sales in August because the affected areas account for slightly more than 1 percent of total retail sales and because the storm occurred at the end of the month.

Total retail sales for August dipped 2.1 percent seasonally adjusted from July due to weak auto sales, and increased 9.5 percent unadjusted year-over-year, the commerce department said.

Retail industry sales for August rose a strong 7.9 percent unadjusted over last year and increased 0.5 percent seasonally adjusted from July, according to the National Retail Federation (Washington).

Given a relatively weak August last year, the gains were stronger than NRF expected.

“Though gas prices are a concern, the August report is further proof that it is unwise to base retail sales projections on one economic indicator,” said Rosalind Wells, the federation’s chief economist. “Retailers who were anxious about the upcoming holiday season may be breathing a little easier.”