Deloitte Consumer Spending Index Reaches an 11-Month High

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Dec 19, 2014, 09:00 ET

NEW YORK, Dec. 19, 2014 /PRNewswire/ -- The Deloitte Consumer Spending Index (Index) reached its highest point in almost a year. The Index tracks consumer cash flow as an indicator of future consumer spending^[i].

"The Deloitte Consumer Spending Index grew to reach the highest reading since November 2013," said Daniel Bachman, Deloitte's senior U.S. economist. "November's number benefitted from improvements in real wages, house prices and the labor market. The fundamentals for consumer spending remain strong."

The Index, which comprises four components – tax burden, initial unemployment claims, real wages and real home prices – increased to 4.5 this month from 4.0 last month.

"Better economic conditions and an anticipated increase in overall holiday sales this year should help retailers end the year strong," said Alison Paul, vice chairman, Deloitte LLP and retail and distribution sector leader. "While Deloitte's 29^th Annual Holiday Survey shows that half of consumers planned to begin shopping before Thanksgiving, 43 percent will do the majority of their shopping in December or later – a six percentage point increase over last year. As a result, retailers should make sure they are fully staffed and stocked up late in the season. Furthermore, with the length of this year's holiday shopping season essentially staying the same as last year, retailers may want to advance their promotional calendar, and therefore avoid any last-minute online shipping delays that they experienced last season. In doing so, customers will remain satisfied especially as their gifts arrive in time for the holiday."

Highlights of the Index include:

Tax Burden: The tax rate has been effectively unchanged from the last month at 11.8 percent.

Initial Unemployment Claims: Claims took a big dip to 280,600 from 295,000 last month down 12 percent from the same period last year.

Real Wages: Real hourly wages were up 0.2 percent from last month and 0.8 percent from the same period last year, increasing to $8.86 this month.

Real Median New Home Price: New home prices increased significantly, rising 16.5 percent from the prior month to $128,000 and are 6.5 percent higher than the same period last year.

For a historical analysis of Deloitte's Consumer Spending Index compared to real consumer spending, visit: www.deloitte.com/us/retail/consumer-spending-index/Nov2014.

About Deloitte's Retail and 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 and 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 and distribution sector, please visit www.deloitte.com/us/retail-distribution.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

^[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.

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SOURCE Deloitte