--RBC consumer outlook index increases to 49.5 for February from
January's 48.0
--But employment index drops 1.1 points to 55.3
--Slight majority say debt-ceiling issue weakens their economic
confidence
By Kathleen Madigan
U.S. consumers feel more confident as February begins, although
the potential negative impact of fiscal issues has them concerned
about the economic outlook, according to data released
Thursday.
The Royal Bank of Canada said its consumer outlook index for
February increased to 49.5 from 48.0 in January. The latest index
is the highest since September.
The RBC current conditions index increased to 41.4 for February
from 38.6 in January and is now at its highest level since January
2008.
The expectations index increased to 58.0 from 56.0.
Consumers are still worried about layoffs, however.
The RBC jobs index fell to its lowest reading since April,
dropping to 55.3 from 56.4 in the previous month. The report said
18% of respondents believe it is likely that they or someone they
know will lose their jobs in the next six months, up from 14%
saying that in January.
The inflation-expectation index declined to 76.4 from 77.6.
In a series of special questions, RBC asked U.S. consumers about
fiscal issues, including the debt ceiling and a potential downgrade
in the ratings of U.S. Treasury debt. A slim majority, 51%, said
the debt and possible downgrade lessen confidence about U.S.
economic growth.
RBC also asked what areas of government spending should be cut
to bring down the federal deficit. The results illustrate the
problems Washington policy makers will face.
Consumers showed a strong preference for cutting foreign aid,
which garners a small sliver of total spending.
But more than three-quarters of respondents didn't want any
reduction to Medicaid, Medicare or Social Security, even though
these three areas are expected to be the biggest sources of federal
spending in coming years.
The RBC consumer outlook survey is conducted online via Ipsos'
Public Affairs.
--Write to Kathleen Madigan at kathleen.madigan@dowjones.com