Ipsos-Reid CASH Index: Consumer Attitudes Make Solid Recovery

WASHINGTON, D.C - The Ipsos-Reid CASH Index--an index of Consumer Attitudes and Spending by Household--stands at 84.4 in the first week of August, down 15.6 points from January 2002, when the index was set at 100, but higher than any results since the June CASH Index surveys.

The Ipsos-Reid CASH Index has fallen to 84.4, but there has been a solid, but marginal recovery in the past two weeks on each of the elements of the index. The dramatic decline in consumer attitudes seen throughout June and July has ended for now. The uptick in the Ipsos-Reid CASH Index in late July-through-early August is significant and real. A new trend line on consumer attitudes has been established, and for now, it is an upward trend line.

Results and index scores for the Ipsos-Reid CASH Index are compiled using rolling averages of two consecutive polls, based on a representative sample totaling 2,000 adults nationwide.

In the current late July-through-early August Index, the deepest negative scores are:

• Local Economic Expectations. Expectations about the future of the local economy are the largest source of doubts. Since January, the percentage of Americans who believe the economy in their local area will improve in the next six months has dropped from 41% in January to 31% today; that is a slight uptick from July.

• Confidence in Investments. Attitudes have flipped on confidence in investments, from 43% more confident to 39% less confident in January to 38% more confident to 49% less confident today. In July, a majority (51%) felt less confident in investments, so that represents a small improvement as well.

• Current Personal Financial Situations. Ratings of current personal finances are evenly divided between positive and negative scores. That has been the consistent pattern throughout the second and third quarters, down from the net positive scores of the first quarter.

Ipsos-Reid CASH Index (Ipsos-Reid Index of Consumer Attitudes and Spending by Household) Mid July - Early August 2002 Changes Since January 2002

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Findings: In this late July-through-early August study, results are significantly improved from what we measured in July. Three areas of intense negative feelings in July have all improved--local economic expectations are at -8.3, up from -10.8 in July; current personal finances are at -2.8, up from -3.3 in July; and confidence in ability to save and invest for retirement or education is at -2.6, up from -3.1 in July. Moreover, two of the three measures of job security are now in positive territory--in July, each of the ten elements of the CASH Index, including all three job security measures, were down from the January index levels.

Conclusion: The dramatic decline in consumer attitudes seen in late June and throughout July has ended for now. The uptick in the Ipsos-Reid CASH Index in late July-through-early August is significant and real. A new trend line on consumer attitudes has been established, and for now, it is an upward trend line.

The margin of error for the questions on each rolling average of two consecutive surveys totaling 2000 adults is 177 2.2%. The Ipsos-Reid CASH Index comprises 10 questions, covering attitudes about the local economy now and in the future, personal finances now and in the future, comfort with making major purchases and other household purchases, confidence in job security and in the ability to save and invest for retirement or education, and job loss experience for self, friends and family in the recent past as well as job loss expectations for self, friends and family in the near future.

For more information on this release, please contact: Thomas Riehle President Ipsos-Reid US Public Affairs 202.463.7300 [email protected]