Deloitte Consumer Spending Index Reverses Course
New York, July 25, 2014 — The Deloitte Consumer Spending Index (Index) reversed course, showing an increase in June. The Index tracks consumer cash flow as an indicator of future consumer spending1.
“Strengthening home prices in May and a drop in unemployment claims put the Index in positive territory, showing a consumer’s ability and willingness to spend,” said Daniel Bachman, Deloitte’s senior U.S. economist. “Although wages are down slightly, there are enough indicators showing the labor market is back, which should offset the wage component’s impact on household spending.”
The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — increased to 3.78 this month from 3.67 last month.
“Consumer sentiment is on the rise due to positive unemployment numbers and the so called ‘wealth effect’ of the stock market, and retailers should look to capitalize,” said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. “As retailers' marketing campaigns go into high gear during the back-to-school season, they will use attractive offers, distinctive events, and promotions to drive traffic. They should similarly ramp up their analytics capabilities to keep track of where families are shopping and the hot items they buy. As expected, consumers will use their electronic devices as personal buying assistants, so retailers should also link their marketing messages across mobile and social channels to increase foot traffic and keep that momentum going through the summer.”
Highlights of the Index include:
For a historical analysis of Deloitte’s Consumer Spending Index compared to real consumer spending, visit: www.deloitte.com/us/retail/consumer-spending-index/June2014.
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1The 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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