The index, comprising four components - tax burden, initial unemployment claims, real wages and real home prices - fell to 3.06 percent, from an upwardly revised gain of 3.34 percent a month ago.
"As Spring begins and the weather improves, retailers will have another chance to meet and surpass customers' expectations," added Pat Conroy, a vice chairman of Deloitte & Touche USA LLP and national managing principal of its Consumer Business industry practice. "As our recent research has shown, customers would like in-stock positions for the products they want to buy, as well as available, knowledgeable sales associates to help them locate items and make decisions. Retailers who get it right will earn long-term customer loyalty."
Highlights of the index, which tracks consumer cash flow as an indicator of future consumer spending, include:
- Tax Burden: The pace of growth in household tax burden has slowed slightly in recent months, adding to the Deloitte Index but resulting in slower revenue growth, particular at the state level.
- Initial Unemployment Claims: After rising early in the year, claims have come down slightly in recent weeks but are still up from a year ago. While claims are nowhere near levels seen in past recessions, the rise in claims is a drag on the Deloitte Index.
- Real Wages: After rebounding sharply last year, real wage growth is still strong relative to recent years but has slowed in the face of higher energy prices.
- Real Home Prices: Home prices rose in February but are down 3 percent from a year ago. The inventory of unsold new homes continues to rise. Problems in sub-prime lending will add another head wind to improvement in the housing market.
