RBC CASH Index: Season of good cheer: U.S. consumer confidence twice as strong as a year ago

New York, NY - After sliding for much of the fall, consumer confidence climbed in the past month and is now more than twice as strong as it was a year ago, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index. Driven by a strong upswing in expectations for the near-term economic future, the RBC Index for December 2009 stands at 39.0, up 8 points from November's 30.2 reading. A year ago, in December 2008, the RBC Index stood at 15.3.

"Traditionally, the holidays are a season of hope and optimism. Despite continuing high unemployment and weak assessments of personal finances, the RBC Index shows that American consumers are optimistic that the economy will soon begin to improve," said RBC Capital Markets U.S. economist Tom Porcelli. "However, overall consumer confidence remains low and susceptible to negative news, which could create more pointed fluctuations in consumer confidence in the near- to medium-term period."

The RBC 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. The Index is composed of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index; and, RBC Jobs Index. The Index is benchmarked to a baseline of 100 assigned at its introduction in January 2002. This month's findings are based on a representative nationwide sample of 1,002 U.S. adults polled from December 3-6, 2009, by survey-based research company Ipsos Public Affairs. The margin of error was 1773.1 per cent.

Improvements this month were seen across all facets of consumer confidence as reflected in the RBC Index's four sub-indices. Highlights of the survey results include:

• Confidence in current conditions improved in the last month, with the RBC Current Conditions Index for December 2009 standing at 37.0, up 8 points from the November reading of 28.8. Consumers report they are more comfortable purchasing not only household products but also major items such as a house or car. However, the percentage of consumers rating their personal financial situation as "weak" remains at roughly one-third; in comparison, only 21 per cent rate their current personal finances as strong.
• Consumer expectations for the near-term economic future fell substantially in November, driven primarily by weakness in attitudes regarding local economies. The RBC Expectations Index for November 2009 plunged to 21.9, a 32.3 point drop from its 54.2 reading in October, which had been the strongest level of consumer expectations in 2009. The primary reason for concern in the near term is with consumers' local economies. Currently, fewer than one-third of Americans (30 per cent) expect their local economy to be stronger six months from now, down from 36 per cent in October.
• Consumer expectations for the near-term economic future improved significantly in December, driven primarily by increasingly positive attitudes regarding the local economy. This movement, coupled with marginal improvements in expectations for personal finances, helped the RBC Expectations Index for December jump to 40.4, an 18-point increase from the 21.9 reading in November.
• The RBC Investment Index climbed 10 points this month, to 46.9 from a 36.6 level in November. The improvement in investment confidence stems from both increasing confidence in the ability to invest in the future. Gains in investment confidence and the stability of assessments of personal finance contribute to the improvement. Among the groups expressing more confidence were young people (under age 35), African-Americans and Hispanics.
• The RBC Jobs Index for December edged up 0.5 points to stand at 51.4, compared to 50.9 in November. Six in ten consumers (62 per cent) report they are less confident about job security (compared to 66 per cent in November). Confidence in the job market has held steady over the past month despite more Americans saying they or someone in their close circle has lost a job in the last six months. Seven-in-10 Americans (71 per cent) personally know someone who has lost a job, up from 66 per cent in November.

The entire RBC CASH Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.

For more information on this release, please contact: Michael Gross, Ph.D. Director Ipsos Public Affairs (202) 463-7300 [email protected]

About Ipsos

Ipsos is a leading global survey-based market research company, owned and managed by research professionals that helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world. Member companies assess market potential and interpret market trends to develop and test emergent or existing products or services, and build brands. They also test advertising and study audience responses to various media, and measure public opinion around the globe.

They help clients create long-term relationships with their customers, stakeholders or other constituencies. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting and offers a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999.

In 2008, Ipsos generated global revenues of e979.3 million ($1.34 billion U.S.).Visit www.ipsos.com to learn more about Ipsos offerings and capabilities.

About RBC Financial Group

Royal Bank of Canada (TSX, NYSE: RY) uses the initials RBC as a prefix for its businesses and operating subsidiaries, which operate under the master brand name of RBC Financial Group. Royal Bank of Canada is Canada's largest bank as measured by assets, and is one of North America's leading diversified financial services companies. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services on a global basis. The company employs approximately 60,000 people who serve more than 14 million personal, business and public sector clients through offices in North America and some 30 countries around the world. For more information, please visit www.rbc.com.