By Rob Starr, Big4.com Content Manager
After two months of consecutive increases, the Deloitte Consumer Spending Index dipped slightly in October. Daniel Bachman, Deloitte’s senior U.S. economist, shared some email responses to our questions about the large and small picture.
How important is the decrease in the index this month in relation to the overall picture?
The downward movement in the October Index is not very significant. It is within the usual
month-to-month variation, and the current level of the Index indicates continued growth.
How are lower gas prices and employment gains factoring in?
While we don’t have gasoline prices in the Index methodology, they do matter to consumer spending. The Index methodology gauges components including initial unemployment claims, real wages, real home prices and tax burden. We pick up employment gains through the unemployment claims part of the index, so we are getting that here, and those levels continue to trend in a positive direction.
What are the other important takeaways/trends from the report?
Slowing housing prices are one area to watch going forward; while prices are still above the level we saw at this time last year, a continued deceleration in home prices could begin to offset some of the more favorable indicators for consumer spending.
What do you see in the future?
Employment and income gains look to continue, and we anticipate that consumer spending will be consistent with economic growth in the 3% range or above.