New York - The Deloitte Consumer Spending Index moved down again in September, showing the second month of small declines. The Index tracks consumer cash flow as an indicator of future consumer spending.
"If the government shutdown is short-lived, retailers may not feel a noticeable impact, but if it persists, consumers may pause at the beginning of the holiday season," said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. "With many retailers planning early promotions this year, shifts in consumer sentiment will likely test retailers' scenario planning techniques.”
Paul advised retailers to run multiple scenarios now, so they can be nimble enough to make quick decisions about their promotions and pricing should demand suddenly tick up or down.
“Those efforts include analyzing store and online traffic patterns, mining social media for changes in consumer behavior, and taking a closer audit of merchandise to determine what is sitting too long on the shelf and which items are effectively bringing customers through the door,” Paul said.
The Index, which comprises four components, tax burden, initial unemployment claims, real wages and real home prices, fell to 3.7 this month from 4.0 last month. Highlights include:
Tax Burden: The tax rate is up 6.8% from last year, and is now at 11.7%.
Initial Unemployment Claims: Claims moved down 9% from the same period last year to 330,000 in the most recent month.
Real Wages: Hourly real wage growth remains slow, hovering at $8.78, which is up 0.1% from the previous month and 0.3% from last year.
Real New Home Prices: Real new home prices were down 0.8% from the month prior, but moved up 4.3% from this time last year to reach approximately $109,000.