Deloitte Index falls to lowest level since '01

NEW YORK The Deloitte Research Leading Index of Consumer Spending fell to 1.3%, its lowest level since 2001. Deloitte attributed the drop to house prices slipping nearly 12% in March and unemployment claims rising 9.8% in the same period.

"This significant drop in the Index gives us empirical data of what many have long suspected," said Carl Steidtmann, chief economist with Deloitte Research and author of the monthly index. "The current economic downturn is as significant as anything we have seen since the last recession."

The Index consists of four components, tax burden, initial unemployment claims, real wages and real home prices. Deloitte reported a revised gain of 1.51% a month ago. 

"With federal income tax rebate checks now hitting consumer's pocketbooks, retailers are aggressively courting consumers to get their share of those dollars," said Stacy Janiak, the U.S. retail sector leader at Deloitte. "It is a full-fledged battle right now that is only going to get more fierce as gas prices continue to rise toward their typical Memorial Day peak. Retailers are expected to offer substantive incentives for rebate check usage and find creative ways to merchandise the shelves and attract the consumer, who is increasingly focused on buying just the basics."