New York -- Deloitte’s Consumer Spending Index rose in September, aided by a near 11% gain in home prices. The Index tracks consumer cash flow as an indicator of future consumer spending.
“The sizable increase in home prices may overstate the strength of the real estate market, though on a positive note, the declines may be over and the market stabilizing,” said Carl Steidtmann, Deloitte’s chief economist and author of the monthly Index. “The increase may also provide a much-needed boost to consumer confidence as other hurdles lie ahead.”
Consumer spending growth has slowed, added Steidtmann, and “the primary reason that it is flat but not declining is that households are putting less into their savings. Energy prices remain a drag on household incomes and rising prices account for the largest month-to-month drop in real wages since September 2005.”
Deloitte’s analysis of factors influencing consumer spending further indicate:
"The ups and downs in housing, employment and energy costs may have given consumers pause this past month,” said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. “As the holidays get into full swing, however, we anticipate shopper enthusiasm will be renewed. Turning their attention away from politics after the election, consumers can get back to the business of shopping. Retailers should benefit from a predicted 3.5% to 4% increase in November through January holiday sales over last year, and non-store channels such as online, catalogs and interactive TV, are expected to increase 15% to 17%.”