RBC CASH Index: U.S. consumer confidence bounces back in October but remains fragile

New York, NY, October 8, 2009 - Propelled by diminishing concerns about current personal finances and job security, U.S. consumer sentiment reached a twelve-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 to 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 U.S. 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."

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 1,000 U.S. adults polled from October 1-4, 2009, by survey-based research company Ipsos Public Affairs. The margin of error was 1773.1 per cent.

Highlights of the survey results include:

• 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 per cent, down from 64 per cent in July. Consumers who feel confident about investing for the future continued to improve, increasing to 33 per cent in October, from 31 per cent last month. Consumer comfort levels for making major purchases, such as a car or new home, also edged up, with 22 per cent of consumers reporting they are more confident this month, compared to 19 per cent in September.
• Fueled by a drop in consumer pessimism, the RBC Current Conditions Index also reached a twelve-month high in October as it climbed to 50.3, up 17.1 points from the September reading of 33.2. The percentage of consumers saying their personal financial situation is weak has dropped to 27 per cent in October from 37 per cent last month. Americans' assessment of current local economic conditions held steady this month, with 41 per cent of consumers saying their local economy is currently weak, essentially the same rate as the 42 per cent observed in September.
• Consumers' near-term economic outlook brightened for the third consecutive month, sending the RBC Expectations Index to 54.2, up 12.7 points from September's level of 41.5. Although consumers' expectations for both their local economies and their personal finances are essentially unchanged since last month, there is now much less concern with impending job losses, resulting in the overall Expectations Index improving. Currently, 36 per cent of consumers believe the economy in their community will be stronger in the next month, while only 16 per cent believe it will continue to weaken, roughly the same split as in September.
• Americans remain guarded about the job market, as evidenced by the slight increase in the RBC Jobs Index by 5.8 points in October to 59.3, well below the 78.8 level observed at this time one year ago. The most significant influence on confidence in job security continues to be real experiences in job loss. This month, 67 per cent of Americans say they or someone in their close circle has lost a job in the past six months, up from 63 per cent in September. Despite ongoing job losses, relative confidence in personal job security also continues to show signs of improvement. Nearly one-third (31 per cent) of American consumers say that they feel more confident in their job security now than they did six months ago, up from 28 per cent in September. Correspondingly, the proportion of consumers who are less confident in their personal job security is down to 58 per cent in October after reaching a high of 71 per cent in March.

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.