Consumer spending index inches up in July

NEW YORK The Deloitte Consumer Spending Index rose to 2.15%, from an upwardly revised gain of 1.85% a month ago, steered by falling unemployment claims and tax burdens, along with a rise in real wages. The Index attempts to track consumer cash flow as an indicator of future consumer spending.

"The uptick in the Index may give retailers and their suppliers a reason for cautious optimism going forward," said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP, and author of the monthly Index. "In previous months, home prices were a significant drag on the Index, but the decline is lessening as the housing market is beginning to show signs of stabilizing. Initial unemployment claims have fallen sharply from their spring peaks and real earnings are up 4.5% from a year ago on falling prices, giving a boost to purchasing power. On top of this, tax rebates from the stimulus bill have brought the tax burden on consumers down to record lows. However, recovery is being delayed by a sharp increase in consumer savings."