Deloitte survey: Consumer spending drops sharply in March

New York City -- A survey released Tuesday by Deloitte found that falling home prices and rising energy costs have negatively impacted consumer purchasing power.



The Deloitte Consumer Spending Index tumbled in March due to a drop in real home prices and a decline in real wages driven by rising energy prices. The Index tracks consumer cash flow as an indicator of future consumer spending.



“Inflation anxiety may continue to wear at consumer confidence in the months ahead,” said Carl Steidtmann, Deloitte’s chief economist and author of the monthly Index. “Despite the recovery, consumers continue to save at a relatively high level, suggesting that consumers have the means to spend -- but not the will. However, a continued improvement in the employment figures could be enough to instill a greater sense of security among U.S. households and offset some of the rising cost pressures as well.”



The Index, which is comprised of four components -- tax burden, initial unemployment claims, real wages, and real home prices -- fell to 3.62%, from an upwardly revised gain of 4.07% a month ago.