The Deloitte Consumer Spending Index was down again in September, showing a second month of small declines. The Index tracks consumer cash flow as an indicator of future consumer spending.
"Although the Index moved down slightly last month, it remained in positive territory," said Daniel Bachman, Deloitte's senior U.S. economist. "These slight variations in economic fundamentals month-to-month during a period of economic recovery are not unusual. In the latest Index, new home prices continued to rise, but the pace of growth is decelerating. Initial unemployment claims continued to fall, but real wages remain flat."
The Index comprises four components: tax burden, initial unemployment claims, real wages, and real home prices. The Index was at 3.7 in September, down from 4.0 in the previous month.
"If the government shutdown is short-lived, retailers may not feel a noticeable impact, but if it persists, consumers may pause at the beginning of the holiday season," said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. "With many retailers planning early promotions this year, shifts in consumer sentiment will likely test retailers' scenario planning techniques."
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