Deloitte Consumer Spending Index moves upward in August
New York City The Deloitte Consumer Spending Index moved up again in August, reaching its highest point since before the start of the recession. The Index attempts to track consumer cash flow as an indicator of future consumer spending.
"The year-over-year pace of decline in real consumer spending appears to have stabilized," said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP, and author of the monthly Index. "Personal income tax rates are at the lowest levels of the past 50 years and unemployment claims are down from their peak, while home prices are beginning to show signs of stabilizing after plunging for the last three years.”
Although the recent strength in auto and home sales indicate that an uptick in real spending is materializing for a select few sectors, U.S. consumers continue to be frugal when it comes to their more discretionary purchases, Steidtmann said.
The Index, comprising four components -- tax burden, initial unemployment claims, real wages and real home prices -- rose to 2.94% from an upwardly revised gain of 2.39% a month ago.
"The recent incentives for autos and housing indicate that consumers are willing to purchase when given a great deal," said Stacy Janiak, vice chairman and U.S. Retail leader, Deloitte LLP. "We are seeing various consumer-facing companies, including retailers, hotels and eating establishments pick up on this trend. These pricing strategies will likely help win over certain shoppers during the important yearend holidays. Retailers, however, should also be taking a longer view. Remaining relevant to customers -- with the right products and services -- will likely be important for growth, particularly if today's downshift in spending continues in some form."