Propelled by diminishing concerns about current personal finances and job security, US consumer sentiment reached a 12-month high in October, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index.

Gains were made in every facet of consumer sentiment, with overall consumer confidence climbing 11.8 points. As a result, the RBC Index stands at 51.8 this month, compared with 40.0 in September. This marks a 50-point improvement over the all-time low of 1.6 observed in February 2009:

"Federal Reserve Chairman Ben Bernanke's assertion three weeks ago that the recession is over, together with a lack of negative financial news since then, have had a galvanizing effect on consumer sentiment," said RBC Capital Markets US economist Tom Porcelli. "Although the trends are moving in the right direction, consumer confidence remains fragile, and unexpected bad news about the economy or markets could once again send sentiment spiraling downward."

Highlights of the Survey's Results

The RBC Investment Index increased sharply this month, climbing 21.1 points to 58.0, the highest mark for the Investment Index this year.

  • Pessimism has declined significantly since mid-summer, with the number of Americans who report they feel less confident in their ability to make investments for the future dropping to 54%, down from 64% in July.
  • Consumers who feel confident about investing for the future continued to improve, increasing to 33% in October, from 31% last month.
  • Consumer comfort levels for making major purchases, such as a car or new home, also edged up, with 22% of consumers reporting they are more confident this month, compared with 19% in September.

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Consumer Confidence at 1-Yr. High

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