Index (Index) rose in September, primarily due to a nearly 11 percent
increase in home prices, which offset weakness in other areas of the
Index. The Index tracks consumer cash flow as an indicator of future
consumer spending 1/8i 3/8.
"The sizable increase in home prices may overstate the strength of the
real estate market, though on a positive note, the declines may be
over and the market stabilizing," said
chief economist and author of the monthly Index. "The increase may
also provide a much-needed boost to consumer confidence as other
hurdles lie ahead. Consumer spending growth has slowed, and the
primary reason that it is flat but not declining is that households
are putting less into their savings. Energy prices remain a drag on
household incomes and rising prices account for the largest
month-to-month drop in real wages since
Deloitte's analysis of factors influencing consumer spending further
— Personal income and spending data for August were disappointing.
Real incomes dropped 0.3 percent while spending was up just 0.1
percent from the previous month. While overall spending is up 2
percent from a year ago, growth in the past three months has been
tepid, falling 0.1 percent in June, rising 0.37 percent in July and
increasing just .08 percent in August. The savings rate also fell
from 4.1 to 3.7 percent in the most recent month.
— Energy prices remain an important factor. Gas prices usually
decline in autumn as the summer driving season ends, but in a highly
unusual turn, they have continued upward this fall.
— The labor market remains a drag on the Index and the broader
economy. Claims have moved up and down and hiring seems limited. Job
gains over the summer were very weak.
The Index, which comprises four components – tax burden, initial
unemployment claims, real wages and real home prices – rose to 3.53
from a reading of 3.27 the previous month.
"The ups and downs in housing, employment and energy costs may have
given consumers pause this past month," said
the holidays get into full swing, however, we anticipate shopper
enthusiasm will be renewed. Turning their attention away from
politics after the election, consumers can get back to the business of
shopping. Retailers should benefit from a predicted 3.5 to 4 percent
increase in November through January holiday sales over last year, and
non-store channels such as online, catalogs and interactive TV, are
expected to increase 15 to 17 percent. In addition to generating
non-store sales, retailers can lift brick-and-mortar performance by
using digital channels' influence to drive in-store traffic and
Highlights of the Index include:
Tax Burden: The tax burden rose slightly in the most recent month to
11.05 percent. A rising tax burden is often a sign of healthy income
Initial Unemployment Claims: Jobless claims moved higher this month to
371,000, and were 2 percent higher than this time last year.
Real Wages: Rising energy prices sent real wages tumbling to
the largest month-to-month drop since
Real Home Prices: In a thin market, housing prices can be volatile as
the mix of homes sold becomes more significant. Real home prices
soared 10.5 percent in the latest month accounting for all of the gain
in the Index.
Following is a historical analysis of Deloitte's Consumer Spending
Index compared to real consumer spending:
About Deloitte's Retail & Distribution Practice
Deloitte is a leading presence in the retail and distribution
industry, providing audit, consulting, risk management, financial
advisory and tax services to 80 percent of the Fortune 500 retailers.
With more than 1,400 professionals, Deloitte's retail & distribution
practice provides insights, services and solutions assisting retailers
across all major subsectors including apparel, grocery, food and drug,
wholesale and distribution and online. For more information about
Deloitte's retail & distribution sector, please visit
As used in this document, "Deloitte" means
subsidiaries. Please see http://www.deloitte.com/us/about for a detailed
description of the legal structure of
subsidiaries. Certain services may not be available to attest clients
under the rules and regulations of public accounting.
Copyright 5/8 2012 Deloitte Development LLC. All rights reserved.
1/8i 3/8 The Deloitte Consumer Spending Index is a proprietary methodology
that analyzes economic factors to gauge consumer cash flow as an
indicator of future spending. Deloitte's analysis includes data from
of the Census,
PRN Photo Desk, email@example.com
/Web Site: http://www.deloitte.com/us
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