Deloitte: Consumer Spending Index Posts its Fourth Monthly Increase

By Rob Starr, Content Manager, Big4.com

Carl Steidtmann, Deloitte’s chief economist and author of the monthly Deloitte Consumer Spending Index (Index) explains the fourth consecutive increase in June through the housing market.

“The housing market is showing signs of recovering, while energy prices continue to decrease, giving a boost to consumer buying power,” he says. “Although consumers are financially stronger, the job market continues to affect their willingness to spend. Additionally, the oppressively hot weather impacting a large part of the country may stifle consumers’ desire to shop.”

Home prices are stabilizing and even turning up in some markets. Record low interest rates are giving a small boost to demand and helping to increase refinancing activity. Most refinances are being done for a lower payment as there is little equity to be cashed out.

The increase in jobless claims took a small pause this month, falling to 376,000 claims, adding slightly to the index. Claims in recent weeks have resumed their slow move higher.

Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader also commented saying Deloitte’s research into smartphones’ influence on retail store sales showed those shoppers are 14 percent more likely to convert in the store. Paul said retailers should provide – not shy away from — mobile applications to capture consumers’ attention throughout the back-to-school season, particularly as smartphone use for shopping skews to younger consumers.