Deloitte Consumer Spending Index Continues Upward in February

The Index, comprising four components — tax burden, initial unemployment claims, real wages and real home prices — increased to 1.53 percent, from an upwardly revised gain of 1.27 percent a month ago.

Highlights of the Index include:

Tax Burden: The tax burden continues to fall with the weakening of the economy. Tax reduction that goes into effect in April will add to a further reduction in tax burden going forward.

Initial Unemployment Claims: Claims rose again in the most recent month and are up 72 percent from a year ago.

Real Wages: Real wage growth continues to post strong growth. Real wages are up 4.6 percent from a year ago and on an annualized basis are up 13.5 percent over the last six months as energy prices have given a big boost to consumer purchasing power.

Real Home Prices: Home prices continue to fall. Renewed efforts to forestall foreclosures coupled with a tax credit for home buyers may bring some stability to this market. The decline in home prices has made home buying much more affordable. What is lacking is mortgage financing.


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