The Deloitte Consumer Spending Index moved up again in August, reaching its highest point since before the start of the recession. The Index attempts to track consumer cash flow as an indicator of future consumer spending.

"The year over year pace of decline in real consumer spending appears to have stabilized," said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP, and author of the monthly Index. "Personal income tax rates are at the lowest levels of the past 50 years and unemployment claims are down from their peak, while home prices are beginning to show signs of stabilizing after plunging for the last three years. The recent strength in auto and home sales indicate that an uptick in real spending is materializing for a select few sectors. However, U.S. consumers continue to ride the wave of frugality when it comes to their more discretionary purchases."

The Index, comprising four components - tax burden, initial unemployment claims, real wages and real home prices - rose to 2.94 percent, from an upwardly revised gain of 2.39 percent a month ago.

"The recent incentives for autos and housing indicate that consumers are willing to purchase when given a great deal," said Stacy Janiak, vice chairman and U.S. Retail leader, Deloitte LLP. "We are seeing various consumer-facing companies, including retailers, hotels and eating establishments pick up on this trend. These pricing strategies will likely help win over certain shoppers during the important year-end holidays. Retailers, however, should also be taking a longer view. Remaining relevant to customers - with the right products and services - will likely be important for growth, particularly if today's downshift in spending continues in some form."

Highlights of the Index include:

Tax Burden: The tax burden continues to fall with the weakening of the economy and the distribution of tax rebates. At 9 percent of personal income, the average tax rate is lower than at any time in the past 50 years.

Initial Unemployment Claims: Claims have dropped sharply since their peak in March. Monthly claims are now below 600,000. A sustained decline in initial unemployment claims is typically an early sign of a recovery in the economy.

Real Wages: Real wage growth continues to post small gains due in large part to falling prices for energy. Real wages are up 5.1 percent from a year ago, the largest year over year gain in more than 50 years.

Real Home Prices: Home prices continue to fall but at a much slower pace. Tax credits for home buyers coupled with low home prices and interest rates are bringing demand back to the market.