"While the Index fell in August, it continues to indicate that overall conditions are positive for consumer spending," said Daniel Bachman, Deloitte's senior U.S. economist. "Americans may remain in a better position to spend, particularly as home prices increase and unemployment rates drop – both of which contribute to improved household finances and sentiment."
The Index, which comprises four components -- tax burden, initial unemployment claims, real wages and real home prices -- fell to 4.0 this month from 4.5 last month.
"Consumers are seeing positive signals from the economy which may buoy confidence heading into the holiday season this fall," said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. "Retailers that merge consumer data from their e-commerce and in-store businesses to gain a more holistic view of their shoppers will be strategically positioned to capitalize on the upcoming holiday season. They will also be better prepared to more appropriately target consumers -- whether in-store or online -- with the right marketing promotions to drive traffic and conversion."
Highlights of the Index include:
Tax Burden: The tax rate is up 6.4 percent from last year, and is now at 11.8 percent.
Initial Unemployment Claims: Claims moved down 7.8 percent from the same period last year to 342,000 in the most recent month.
Real Wages: Hourly real wages are down slightly from the previous month, but up 0.2 percent from last year.
Real New Home Prices: Real new home prices climbed 7.9 percent from this time last year to reach approximately $110,000.
About Deloitte's Retail & Distribution Practice
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[i] 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 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.