Consumer confidence declined to an all-time low in early January 2008, according to one measure, as concerns about jobs, energy prices, and home foreclosures weighed on the public's outlook for the economy and their personal finances, The Associated Press reported Friday. The RBC Cash Index fell to 56.3 in early January 2008 from 65.9 in December 2007, RBC said in a statement. The January stat is the lowest reading since the index's inception in 2002, RBC announced. One year ago, in January 2007, the idex stood at a healthy 95.3.
Economic headwinds weigh
Economist David H Wang told BloggingStocks Friday the data reflects consumer awareness of sub-par U.S. economic fundamentals, and the uncertain outlook for the nation in 2008.
"The January [2008] statistic is not surprising. People are aware that housing foreclosures are up, the housing market is in a recession, energy prices have been sky high for a while now, so naturally one would expert the index to drop," Wang said. "When you add the most-recent data showing that now, quite possibly, job creation may be slowing, that sends another concern on to the American people's watch list."
Election-year recession?
Wang added that the RBC Index, "suggests that consumer spending may continue to pullback, if wallet / pocketbook actions follow consumer sentiment, as they historically have done. It's not the rosiest outlook for consumer spending for 2008."
Further, if current trends continue -- and Wang "hopes they don't" -- the United States is set to register an ignominious statistic -- its first recession in a U.S. presidential election year, 2008, in more than 40 years.
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. This month's data is based on a survey of 1,027 adults on January 7-9, 2008, and has a margin of error of 3.1%.
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