U.S. consumer confidence slumps

While the news has been dominated by the European debt crisis, worries about jobs are what weighs most on U.S. consumer sentiment, according to the latest RBC Consumer Outlook Index.

Amid continuing job concerns, U.S. consumer confidence remained nearly flat for October, the third consecutive month with little change, according to the RBC Consumer Outlook Index. The October index fell one point below the previous month, to 39.2. That total sits below what it was a year ago (41.0) and is also below the average consumer confidence level shown during the recession (40.2).

“Jobs remain the biggest driver of confidence, and growing worries about employment security are affecting the consumer outlook,” said Tom Porcelli, chief U.S. economist for RBC Capital Markets.

The RBC Jobs Index fell 3.3 points to stand at 47.2, its lowest level since March 2010. Nearly half (46%) of consumers surveyed say they or someone they are close to has lost a job in the last six months, up nine points from last month. Employed respondents are also increasingly worried about job security, with 34% saying they are currently concerned about losing their job, up six points from last month.

In addition to the domestic job market, 59% of those surveyed say they are following developments in the European financial crisis, and 36% say that the crisis has worsened their confidence in the U.S. economy.

Despite this declining confidence in the job market, 47% indicate they have not made changes to their retirement fund contributions. Of those who have made changes, 7% have shifted away from stocks, 6% have decreased their retirement fund contributions, and 2% have increased contributions.

Three in four (75%) Americans polled say the U.S. is on the wrong track, the same as in September and up from 63% in October 2010.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.