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Consumer Confidence Declines

Posted by Meredith Dwyer on July 11 2011 @ 9:05 am

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Consumer confidence recently fell. The latest edition of the RBC consumer Outlook Index showed a decline to 43.7 in July, from 46.7 in June.

Much of the American population has cut back spending, and this may not bode well for the economy. For the remainder of the year, more than 90 percent of consumers plan to either continue their frugal behavior, or cut back spending even further.

"The overall trend in consumer confidence since it bottomed out early in 2009 has been positive, but the improvements have been erratic, said Tom Porcelli, RBC capital markets chief U.S. economist. After a solid rally last month, the RBC Consumer Outlook Index for July saw across-the-board declines, with decreases in all of the sub-indices, indicating the continued fragility of the national psyche."

Consumers may be cutting down on their credit card debt due to spending cutbacks. While this could mean bad things for the economy, slowing credit spending in a tough climate may be positive for those with a poor credit rating. The lack of credit spending minimizes the chance to ruin one's credit portfolio.