The latest measurement of consumer confidence hit a new low, but it would have been even lower if not for the “Obama Factor.” Consumers are frustrated with the ongoing inability of the government and the private sector to stabilize the economy. However, the slide in consumer confidence is offset somewhat by an increase in expectations for the future, just days before President-elect Obama is inaugurated. The composite “RBC CASH Index” stands at 13.3 for January, 2.9 points below November, and a six-year low. The “RBC Jobs Index” saw an incremental drop of nearly 4 points in January to 61.8, compared to 65.6 last month, and a new all-time low. The “RBC Current Conditions Index” dropped to another all-time low in January and currently stands at 8.7, compared to 16.5 last month. The “RBC Investment Index” currently stands at 22.5, down from 31.0 in December. However, the “RBC Expectations Index” was the one bright spot, actually improving in January to -11.3 from -21.2. RBC says a lack of decisive action and some quick results by the incoming Obama administration could negatively affect the economic confidence of the American public, causing it to sink yet further.
RBC CASH INDEX Jan 08: 56.3 Feb 08: 48.5 Mar 08: 33.1 Apr 08: 29.5 May 08: 39.0 Jun 08: 22.5 Jul 08: 14.6 Aug 08: 33.8 Sep 08: 69.2 Oct 08: 37.0 Nov 08: 34.7 Dec 08: 15.3 Jan 09: 13.3 Source: Royal Bank of Canada