NEW YORK — The Deloitte Consumer Spending Index, which tracks consumer cash flow as an indicator of future consumer spending, fell to 3.16% from an upwardly revised gain of 3.78% a month ago.
The index showed the largest single month decline since November 2007.
Deloitte said that the index, which is comprised of four components — including tax burden, initial unemployment claims, real wages and real home prices — saw a drop due to "a sharp deterioration in real wages coupled with a rise in jobless claims."
"Growth in consumers’ disposable income recently accelerated following a cut in Social Security taxes, giving consumers the means to spend," Deloitte’s chief economist and author of the monthly index Carl Steidtmann said. "However, rising food and energy prices have started to undermine consumers’ purchasing power, which may continue to lose ground to inflation in the months ahead, particularly if unemployment claims head higher."