Rising gas prices and a soft housing market have sent consumer confidence to its lowest level in 10 years, according to an index released Friday.
Analysts were surprised at the dramatic decline in the RBC Cash Index as the national job market remained strong.
The index found that people’s views of their finances and current economic conditions turned negative in June, following a month in which confidence in the economy was high.
“There is too much uncertainty. That is the mindset of consumers right now,” said Brian Bethune, economist at Global Insight. “Consumers are kind of in a schizophrenic zone, where the job market is good. They’re getting reasonably good pay increases, but at the same time, they are getting hit with higher gasoline prices, and the housing market is still not looking good.”
Local consumers interviewed by The Examiner agreed with the national consensus captured in the index.
“I feel very skeptical about the economy,” said Hector Centeno, a Columbia Heights resident. He said he was feeling the pinch from high gas prices, especially at the grocery store, where food prices have gone up due to increased shipping costs.
“Now I leave my car parked at home,” he said.
John Hardenbergh, a District resident, said he senses the economy is on the decline.
“I don’t think the economy is going well,” he said. “The economy is going really well for some people, but not most.”
If gas prices are the main culprit behind the drop in consumer confidence, AAA spokesman Lon Anderson said, confidence could improve through the summer, as prices are likely to go down.
“There’s a reasonable expectation that these prices are too high and will be coming down,” he said. But he urged patience, saying prices “go up like a rocket and fall like a feather.”
Mike Shawe contributed to this report.
