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Subprime worries, softening job markets, rising gas prices and an unstable stock market have taken a serious toll on consumer sentiment, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index, which measured the attitudes of 1,000 Americans earlier this week. Consumer confidence tumbled across the board, reaching the lowest level since May 2006, as Americans view the current economy negatively and display growing pessimism about the future. As a result, the overall RBC CASH Index, released today by RBC, stands at 71.1 for September 2007, more than 18 points below August's 89.3 level.
"The magnitude in the drop of consumer confidence is not surprising given the rocky economic ride consumers are experiencing," said T. J. Marta, Economic and Fixed Income Strategist for RBC Capital Markets. "Americans have a dim view of their current financial situation and an even bleaker view of their future prospects. Although some of the factors weighing on consumers could dissipate in coming weeks, the decline in confidence is consistent with our view that U.S. economic growth will moderate through the remainder of the year."
The RBC CASH Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The Index is composed of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index; and, RBC Jobs Index. The Index is benchmarked to a baseline of 100 assigned at its introduction in January 2002. This month's findings are based on a representative nationwide sample of 1,000 U.S. adults polled from September 10-12, 2007, by survey-based research company Ipsos Public Affairs. The margin of error was plus or minus 3.1 per cent.

  Highlights of the survey results include:

  -   Consumers' economic outlook dropped sharply during the past month, as
      seen in the RBC Expectations Index, which declined nearly 30 points
      to 14.4 compared to 43.9 in August. Expectations about job loss grew
      gloomier as only 49 per cent of consumers reported that it is
      unlikely they or someone they know will lose their job in the next
      six months, down from 56 per cent last month. Worries over prospects
      for the local economy also increased, with 23 per cent of Americans
      expecting their local economy to be weaker in six months, compared to
      17 per cent in August. The only bright spot is that consumers'
      expectations about their personal finances held steady. More than
      one-third (36 per cent) reported they believe their personal finances
      will be stronger in six months, compared to 35 per cent in August.

  -   Increased pessimism about job security combined with more personal
      job loss drove the RBC Jobs Index down nearly 11 points to 113.6, its
      lowest level of 2007. Forty-five per cent of Americans reported
      feeling less confident about their job security, up five points from
      last month. Personal job loss experience in September increased by
      3 points, with 33 per cent of consumers reporting job loss in their
      immediate circle compared to 30 per cent in August.

  -   The RBC Current Conditions Index slid more than 15 points in
      September, down to 90.5, compared to 105.6 in August. Negative views
      of the current state of the economy outweigh positive views, with one
      in three Americans (31 per cent) rating their local economy as weak,
      considerably more than the 19 per cent who rate their local economy
      as strong. Consumers' comfort level for making household purchases
      fell to 35 per cent in September from 37 per cent last month, and
      ratings of current personal finances also declined, with 27 per cent
      of Americans rating their current financial situation as weak,
      compared to 23 per cent in August.

  -   As consumers' views of both the current economy and their future
      prospects darken, they are less confident of their ability to make
      investments or major purchases. The RBC Investment Index declined
      almost 10 points to 88.3 this month, compared to 97.9 in August.
      Consumers' investment confidence declined on all measures with the
      largest decline coming from confidence in investing for the future.
      In September, 44 per cent of Americans reported they are less
      confident in their ability to invest in the future, compared to only
      37 per cent in August.

About RBC
RBC (RY on TSX and NYSE) is Canada's largest bank as measured by assets and market capitalization and one of North America's leading diversified financial services companies. In the United States, RBC provides personal and commercial banking, wealth management, insurance, corporate and investment banking and transaction processing services to about two million clients through RBC Centura, RBC Insurance, RBC Liberty Insurance, RBC Dain Rauscher and RBC Capital Markets. The company employs approximately 70,000 full- and part-time employees who serve more than 15 million personal, business, public sector and institutional clients throughout offices in North America and 34 countries around the world.
For more information: http://www.rbccm.com/

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