The Deloitte Consumer Spending Index (Index) remained flat in February, showing only a marginal change. The Index tracks consumer cash flow as an indicator of future consumer spending1.
“The fundamentals for consumer spending remain stable,” said Daniel Bachman, Deloitte’s senior U.S. economist. “While the economy continues to grow at a moderate pace, expect growth to accelerate over the next six to eighteen months, and the outlook for consumer spending to improve along with the economy.”
The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — ticked down slightly to 3.9 from 4.0 last month.
“While businesses may be inclined to play it safe with regard to their investment strategies, the time may be right to make a strategic play now,” said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. “Market conditions — including access to inexpensive capital and strong corporate balance sheets — are creating a favorable M&A environment. Retailers thinking about new markets or adjacent categories to enhance their offering and grow the top line could take advantage of these positive deal-making conditions. Of course, growth through M&A is not for everyone, but it could be a powerful option for retailers looking to up their game and appeal to a broader set of customers.”
Highlights of the Index include:
- Tax Burden: The tax rate stayed at 11.8 percent, consistent with recent months.
- Initial Unemployment Claims: The four-week moving average of initial unemployment claims fell to 332,600, a 7 percent decrease from the previous month.
- Real Wages: Real hourly wages moved up 0.2 percent to $8.82, and have been gradually increasing over the past year.
- Real New Home Prices: New home prices dipped 2.3 percent to $111,000 from $113,000 the month prior.
