Following two consecutive months of declines, consumers are beginning to shed their worries about consolidating debt, and a new Deloitte survey shows that spending increased throughout March.
The latest Deloitte Consumer Spending Index for March, which was released on Tuesday, increased by 0.26 percentage points to hit 4.47 percent, from a downwardly revised figure of one month earlier.
The increase was attributed primarily [to] continued declines in initial unemployment claims and real home prices, while real wages were only down slightly from one year earlier.
"The improvement in the index was primarily driven by the job market, as initial unemployment claims continue to trend downward from their peak one year ago. Tax rates, which were cut last year as a part of the government’s stimulus package, also moved downward," said Carl Steidtmann, chief economist with Deloitte Research. "At the same time, declining real home prices remain a drag on the Index, although the double-digit price declines of a year ago have eased to the low single digits."
Stacy Janiak, a vice chairman and Deloitte’s U.S. retail leader, added that while there was still room for the index to increase, consumers had "shed some of their restraint in recent months."