RBC CASH Index shows fall in consumer confidence
August 5, 2005
Consumer confidence fell again in early August in the US, according to the RBC CASH Index. It was the second monthly decline in a row. The Index, based on a poll by Ipsos, fell to 72.6, down from 73.9 in July. A year ago the figure was a much higher 104.8.
Confidence was at its lowest since early March 2003, just before the beginning of the Iraq war. The biggest drop was in consumers’ confidence about conditions where they live and work and about their own financial circumstances over the next six months, with an August figure of 32.2, down from 34.4 last month and much lower than last year’s figure of 98.2.
Analysts gave a number of reasons for the decline in confidence, including fears of terrorism following recent attacks in London, the situation in Iraq, high energy prices, worries about security in retirement, and the housing bubble. Still, analysts pointed out that the overall economy is in good shape, with consumers still spending money, especially on big-ticket items such as cars, no matter how they feel about the economy.