RBC Cash Consumer Index Down In August

US consumer confidence on one popular index tumbled to its lowest point in over a year as the housing slump and the credit crunch seem to be making people more worried about what exactly the immediate future has in store.

The RBC Cash Index showed consumer confidence at 71.1 in September, a sharp drop from August's reading of 89.3. This was the worst showing on this particular index since May 2006, when higher gasoline prices shook peoples' sense of economic well-being.

Subprime worries, softening job markets, rising gas prices and an unstable stock market have taken a serious toll on consumer sentiment, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index, which measured the attitudes of 1,000 Americans earlier this week. Consumer confidence tumbled across the board, reaching the lowest level since May 2006, as Americans view the current economy negatively and display growing pessimism about the future. As a result, the overall RBC CASH Index, released today by RBC, stands at 71.1 for September 2007, more than 18 points below August's 89.3 level.

As we can see from the chart the index does move around a bit, but then apart from the small spike in August it has been steadily heading down since February, and it does fit in with other data we have been getting, so..........



On another front, the Commerce Department reported Friday that retail sales increased 0.3 percent in August, compared to July, when sales went up by 0.5 percent. The strength last month was led by a 2.8 percent jump in auto sales, the biggest increase since July 2006. Again, as we can see below, things seem to be slowing:





The Federal Reserve also reported today that industrial production was up just 0.2 percent in August. This was the poorest performance in three months and reflected a 0.3 percent drop in output at U.S. factories, the first decline in manufacturing after five straight increases.

The 0.3 percent gain in industrial output followed much stronger increases of 0.5 percent in July and 0.6 percent in June. The drop in manufacturing output was accompanied by a decline of 0.6 percent in mining, the category that includes oil production. These declines were offset by a 5.3 percent surge in output at the nation's utilities, reflecting a hotter-than-usual August.

Looking at the chart, again the pace of increase in manufacturing output definitely seems to have slowed since June:

US August 2007 PMI

U.S. manufacturing expansion slowed in August from July according to the Institute for Supply Management monthly report. The ISM index of national factory activity eased to 52.9 last month, its lowest since March and down from 53.8 in July. Analysts had been looking for a more modest dip to 53.0, although any reading above 50 still points to expansion.

US Construction Spending July 2007

Construction activity plunged in July by the biggest amount in six months as spending on homes fell for a record 17th straight month. The Commerce Department reported Tuesday that construction spending dropped 0.4 percent in July, compared with June, the weakest showing since a 0.6 percent fall in January. It was a bigger drop than economists had been expecting and underscored the continued drag the severe slump in housing is having on building activity. Overall spending dropped to a seasonally adjusted annual rate of $1.169 trillion after having posted a 0.1 percent increase in June. Housing activity fell by 1.4 percent, more than double the 0.6 percent decline in June, and has now declined for a record 17 straight months as US home building suffers its worst slump in 16 years.

Here's the chart.