Deloitte: Spending Index Is Up
The Deloitte Consumer Spending Index posted its fourth consecutive increase in June. The Index tracks consumer cash flow as an indicator of future consumer spending.
"The housing market is showing signs of recovering, while energy prices continue to decrease, giving a boost to consumer buying power," explains Carl Steidtmann, Deloitte's chief economist and author of the monthly index. But he says the job market continues to put a halter on consumer willingness to spend. Not to mention the oppressively hot weather. Gasoline prices are down 20 cents in the past month but are down just 14 cents from a year ago. Unseasonably hot weather across much of the country could be offsetting some of the benefit of this price reduction.The labor market remains very fragile, despite this month's small decline in jobless claims.
Consumer confidence has fallen sharply over the past two months due largely to the renewed weakness in job growth. 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.