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Deloitte consumer spending index posts small decline

Courtney Flaherty
Deloitte
Public Relations
+1 203 905 2708

New York, December 19, 2013 — The Deloitte Consumer Spending Index (Index) tipped down slightly in November. The Index tracks consumer cash flow as an indicator of future consumer spending1.

“Despite a small decline this month, the Index remains relatively stable and is poised for improvement in 2014, should the key economic fundamentals stay on their current trajectory,” said Daniel Bachman, Deloitte’s senior U.S. economist. “Additionally, consumers may have both the willingness and the ability to spend, as households benefit from stock market gains, lower gas prices and the lowest debt-to-income ratio since 1980.”

The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — dropped to 3.7 this month from 3.8 last month.

“The holiday season should help retailers finish 2013 on a high note,” said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. “Better economic circumstances have boosted consumers’ holiday spirits compared to seasons past, and we expect this will help the retail industry see a modest 4.0 to 4.5 percent increase over last year’s holiday sales. Retailers have been marketing consistently and frequently across their online, mobile and brick-and-mortar channels, which may improve their inventory position heading into the new year. Consumers may need to act on those promotional offers soon, otherwise they may be disappointed to find empty shelves during the final days of holiday shopping.”

Highlights of the Index include:

  • Tax Burden: The tax rate is up now at 11.7 percent, a 0.8 percent increase from last month. A rising tax rate is associated with increasing incomes.
  • Initial Unemployment Claims: Claims in October were up compared to the previous month, but moved down nearly 11 percent from the same period last year to 354,000.
  • Real Wages: Real hourly wages rose 1.2 percent from this time last year to $8.81, an acceleration from the growth rate in recent months.
  • Real New Home Prices: New home prices slipped 4 percent from the prior month, to 105,000.

For a historical analysis of Deloitte’s Consumer Spending Index compared to real consumer spending, visit: www.deloitte.com/us/retail/consumer-spending-index/November2013

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 more than 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 www.deloitte.com/us/retail-distribution.

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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