By Rob Starr, Content Manager, Big4.com
The Deloitte Consumer Spending Index (Index) slid again in December, following November’s decrease after a year of steady gains. The Index tracks consumer cash flow as an indicator of future consumer spending.
Tax burden: The tax burden was at 11.03 percent in the most recent month. A falling tax burden can be a sign of weaker growth in taxable incomes.
Initial unemployment claims: Jobless claims moved much higher this month to 405,750 from 367,250 the previous month, primarily due to the effects of Hurricane Sandy.
Real wages: Real wages continue to fall from a year ago and are down 0.3 percent, although the pace of decline has moderated as gasoline prices fell sharply in November.
Real home prices: The housing market continues to improve, pushing housing prices up nearly 13 percent higher compared to a year ago.
“The decrease in the Index this month is primarily due to Hurricane Sandy — which induced jobless claims, though that effect appears to have passed,” said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. “On the plus side, consumers benefited from falling gasoline prices through the last quarter, which helped temper declining real wages. However, the fiscal cliff debate appears to have impacted consumer confidence late in the year, compounding the adjustment to new tax rates — all of these factors may lead to more conservative spending in the months ahead.”