NEW YORK–Consumer spending may be nearing a “turning point,” with “worrisome” implications for retail.
According to Deloitte Research, its index on spending has fallen for the fourth consecutive month after September 2007. The index, which tracks consumer cash flow as an indicator of future spending, is based on tax burdens, unemployment claims, real wages and real home prices.
“With the Leading Index now declining, the outlook for retailing is worrisome,” said Stacy Janiak, a Deloitte vice chairman.
The index’s author, Carl Steidtmann, cited falling home prices; increases in food and energy prices, which translate to a drop in real hourly earnings; and rising unemployment as the factors underlying the decline.