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New York City -- Falling real wages and rising jobless claims in April contributed to largest single month drop in the Deloitte Consumer Spending Index since November 2007. The Index, which tracks consumer cash flow as an indicator of future consumer spending, fell to 3.16% from an upwardly revised gain of 3.78% a month ago.
Deloitte said that the index, which is comprised of four components — including tax burden, initial unemployment claims, real wages and real home prices — saw a drop due to "a sharp deterioration in real wages coupled with a rise in jobless claims."
According to Carl Steidtmann, Deloitte’s chief economist and author of the monthly Index, “rising food and energy prices have started to undermine consumers’ purchasing power, which may continue to lose ground to inflation in the months ahead, particularly if unemployment claims head higher.”