Deloitte Consumer Spending Index Hits a 51-Month High

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Feb 12, 2015, 09:30 ET

NEW YORK, Feb. 12, 2015 /PRNewswire/ -- The Deloitte Consumer Spending Index ("Index") increased in January, reaching its highest level since September 2010. The Index tracks consumer cash flow as an indicator of future consumer spendingⁱ.

"The Deloitte Consumer Spending Index increased in January, hitting a 51-month peak," said Daniel Bachman, Deloitte's senior U.S. economist. "The increase is due to positive contributions from all four components of the Index. The sharp drop in unemployment insurance claims is in line with a steady recovery in the U.S. labor market and augurs well for continued increased consumer spending. Additionally, January gas prices decreased 41 percent from this time last year, to a national average of $2.12 per gallon. That translates into an extra $994 in consumers' pockets annually."

The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — increased to 4.8 this month from 4.2 last month.

"The improving economic picture, a stronger dollar that can positively impact retailers' margins, and accelerating consumer spending should encourage retailers to invest for growth," said Alison Paul, vice chairman, Deloitte LLP, and retail and distribution sector leader. "To start, retailers should assess whether their business is evolving with customer expectations. Convenience has made a comeback on the heels of improving household finances, while digital experiences increasingly influence consumers' preferences whether shopping online or in the store. Simply having a presence across each shopping platform is insufficient. There is an opportunity to engage the consumer in a cohesive shopping journey rather than disparate multi-platform visits, extending well beyond promotions to product assortment, pricing, shipping, return options."

Highlights of the Index include:

Tax Burden: The tax rate was effectively unchanged from the last month, remaining steady at 11.9 percent.

Initial Unemployment Claims: Claims decreased to 291,000 from 299,600 last month, and are down 15.6 percent from the same period last year.

Real Wages: Real hourly wages were up 0.2 percent from last month and 1.1 percent from the same period last year, increasing to $8.94 this month.

Real Median New Home Price: New home prices increased 2.6 percent from the prior month to $126,000. Prices are 7.2 percent higher than the same period last year.

About Deloitte's Retail and Distribution Practice

Deloitte is a leading presence in the retail and distribution industry, providing audit, consulting, risk management, financial advisory and tax services to more than 80 percent of the Fortune 500 retailers. With more than 1,400 professionals, Deloitte's retail and 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 and distribution sector, please visit www.deloitte.com/us/retail-distribution.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

ⁱThe 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 the U.S. Commerce Department, Bureau of Economic Analysis, U.S. Bureau of the Census, U.S. Department of Housing and Urban Development and the U.S. Department of Labor.

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SOURCE Deloitte