Americans confidence falls for second straight month

07.19.09
By Nicholas Storie

Although economic figures seemed to indicate that the economy was poised for a rebound, a new study of consumer sentiment shows that those assumptions may have been too rosy as Americans' continue to struggle with financial problems like paying off credit card debt and home loans.

The RBC CASH (Consumer Attitudes and Spending by Household) Index fell in July for the second straight month to 22.4, down from June's reading of 34.3.

Consumers also appear to have little faith that the economy will spring back any time soon with the RBC Expectations Index dramatically falling 36.1 points in July and now standing at 4.8. This drop cuts into the four straight months of increases for consumers expectations of the economy in the next six months. RBC notes that the previous four months was the longest stretch of rising expectations since the index began in 2002.

Larry Miller, managing director of RBC Capital Markets, says July's figures show that Americans are realizing that they are not out of the woods yet when it comes to their personal finances and the economy.

"The RBC CASH Index for July confirms what we first saw last month: consumers are getting realistic. They're coming to grips with the idea that we will not see a quick economic turnaround but instead face a lengthy, drawn-out recovery," he said. "Consumer confidence is resetting to the levels seen earlier this year and is likely to remain there until there is concrete evidence of a turnaround."

A separate poll released earlier this week from ABC News found that consumer confidence has essentially "flat-lined" and at -51 on the ABC News Consumer Comfort Index, is now 3 points from the all-time low it reached in January of this year.

While those who rated their personal finances as "excellent" or "good" in the ABC poll ticked up slightly last week, the survey found that only 8 percent of Americans would rate the economy favorably.

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Americans appear to be increasingly less confident about the economy