Deloitte Consumer Spending Index Moves Up In June

NEW YORK, July 13 /PRNewswire/ -- The Deloitte Consumer Spending Index rose in
June, after falling four consecutive months. The Index attempts to track
consumer cash flow as an indicator of future consumer spending.

"The pace of decline in real consumer spending appears to be abating," said
Ira Kalish, director of global economics and consumer business with Deloitte
Research, a subsidiary of Deloitte Services LP, and author of the monthly
Index. "High savings rates and unemployment accompanied by a weak housing
market have weighed on consumer spending for months, but trends are starting
to point in a different direction. For example, the rate of decline in
housing prices began to decelerate and, in June, real home prices finally rose
from the previous month."

The Index, comprising four components -- tax burden, initial unemployment
claims, real wages and real home prices --rose to 1.83 percent, from an
upwardly revised gain of 1.4 percent a month ago. The strength in the number
was driven by all of the index components with the exception of real home
prices.

"There are signs that consumer spending may soon start to point upward again;
however, retailers continue to grapple with economic uncertainty and the
prospect of slow growth once a recovery does arrive," said Stacy Janiak, vice
chairman and U.S. Retail leader, Deloitte LLP. "At the same time, retailers
are heading into the largest selling events of the year, beginning with the
back to school season this month. As retailers analyze back to school sales
and plan their holiday inventory and assortment, their focus should include
understanding what shoppers value, then localizing selections and customer
loyalty strategies for individual retail locations."

Highlights of the Index include:

Tax Burden: The tax burden continues to fall with the weakening of the economy
and with tax cuts embedded in the stimulus plan taking effect. This is
expected to continue to have a positive impact on the index in the months
ahead.

Initial Unemployment Claims: Claims remain at a historically high level.
Still, the direction is quite positive and suggests that the job market is
bottoming out.

Real Wages: Real wages have flattened over the past several months due in
large part to weakness in the job market. However, on a year over year basis,
real wages are rising at an accelerating rate, in part due to deflation.
Declining commodity prices combined with weak overall demand has contributed
to the steepest decline in prices in over 50 years.

Real Home Prices: The decline in real home prices appears to be ending. Lower
prices and low interest rates have encouraged a renewal in home buying which,
over time, will likely lead to stabilization of prices. However, recent
increases in long term rates could have a negative impact on the housing
market.

For more information about Deloitte's Retail sector, please visit
www.deloitte.com/us/retail.

About Deloitte

As used in this document, "Deloitte" means Deloitte LLP and Deloitte Services
LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a
detailed description of the legal structure of Deloitte LLP and its
subsidiaries.

SOURCE Deloitte

Courtney Flaherty, Public Relations, Deloitte, +1-203-905-2708,
cflaherty@deloitte.com; or Daniel Pineyro, Account Executive, Hill & Knowlton,
+1-212-885-0312, daniel.pineyro@hillandknowlton.com