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Consumer Spending Index Inches Up in May

Improvements in housing and labor lifted ""Deloitte's"":http://www.deloitte.com/view/en_US/us/index.htm Consumer Spending Index for May, the company reported.


The index, which comprises four components--tax burden, initial unemployment claims, real wages, and real home prices--rose to a reading of 4.27 from April's 4.12. The index tracks consumer cash flow as an indicator of future spending.


""Three out of the four components of the Index contributed to an uptick in May and have stayed on a moderate and steady track of improvement over the past several months,"" said Daniel Bachman, senior U.S. economist for Deloitte. ""The labor market has stabilized, and initial unemployment claims fell nearly six percent since this time last year, while real home prices continued to climb and real wages crept up.""

According to Deloitte's report, real new home prices climbed to $117,329 in May, an increase of 8.5 percent from the same time last year.

Meanwhile, initial unemployment claims moved down to 343,000, nearly a 6 percentage point decrease from last year. At the same time, hourly real wages moved up 0.4 percent from the same period in 2012, reaching $8.81.

The only component not contributing to May's increase was the tax burden, which remained flat compared to April but was up 2.26 percent over last year.


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