Consumer spending rises, according to Deloitte
Friday, April 13, 2012
The recently released Deloitte Consumer Spending Index revealed an increase in March, which marks the first report of growth following several months of decline.
This marks only the third monthly increase in a year as the index tracks consumer cash flow as an indication of how future consumer spending will shake out. Retail incomes dropped 0.1 percent in February despite consumer spending rising, however.
"The Index turned upward as the pace of declining new home prices slowed," said Carl Steidtmann, Deloitte's chief economist and author of the monthly index. "Despite this improved performance, there is little evidence the housing market is picking up. On the positive side, initial unemployment claims continue to move lower from a year ago."
In addition, the savings rate dropped to 3.7 percent from 4.7 percent over the past two months, which added close to $110 billion to consumer spending.
With many consumers receiving a tax refund in the coming weeks, some will want to invest their new found cash infusion. A recent report from BMO Harris Bank suggests consumers use their tax refund to invest in their home. Consumers can also invest in the stock market.
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