Consumer spending continued its backslide in December, according to professional services firm ""Deloitte"":http://www.deloitte.com/view/en_US/us/index.htm.[IMAGE]
Deloitte's Consumer Spending Index--which is made up of components measuring consumer tax burden, initial unemployment claims, real wages, and real home prices--slipped to 3.81 in December from November's reading of 3.96. The decline continues a downward trend that started in November after nearly a year of steady gains.
Most of December's decline in spending stems from a sharp increase in initial unemployment claims following [COLUMN_BREAK]
superstorm Sandy, according to Deloitte vice chairman Alison Paul. First-time claims reached 405,750 at the start of December, an increase of nearly 40,000 from the previous month.
""On the plus side, consumers benefited from falling gasoline prices through the last quarter, which helped temper declining real wages,"" Paul noted. ""However, the fiscal cliff debate appears to have impacted consumer confidence late in the year, compounding the adjustment to new tax rates--all of these factors may lead to more conservative spending in the months ahead.""
According to Deloitte, the tax burden on consumers reached 11.03 percent for December, up slightly from November. The company explained that an increase or decrease in tax burden can be a sign of weak or strong growth in taxable incomes.
Real wages continued to fall on a year-over-year basis, slipping 0.3 percent. While wages were down, Deloitte notes that the pace of the decline leveled somewhat as gas prices fell in November.
Further declines were also mitigated by improvements in the housing market, which pushed real home prices up nearly 13 percent year-over-year.