NEW YORK — Rising unemployment claims, coupled with rising food and energy prices, prompted a decline in consumer spending outlook for May, according to Deloitte.
The Deloitte Consumer Spending Index, which is comprised of four components — tax burden, initial unemployment claims, real wages and real home prices — fell to 2.66%, from an upwardly revised gain of 3.29% a month ago.
“The labor market indicators are the primary cause of weakness in the index; however, the economy is up against other temporary headwinds that suggest weak growth may persist for the near term,” Deloitte’s chief economist and author of the monthly index Carl Steidtmann said. “Rising food and energy prices continue to hurt real wages, which combined with Americans’ insecurities about the job market, compound the pressure on consumer spending.”
In April, the index experienced the sharpest single-month decline since November 2007.