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New York, New York - (Cheap Web Hosting Directory) - July 18, 2007 - According to the Deloitte Research Leading Index, consumer spending rose slightly this month, despite continued falling home prices and rising gasoline prices. Highlights of the index report track consumer cash flow as an indicator of future consumer spending.

Carl Steidtmann, Chief Economist with Deloitte Services LP’s Deloitte Research and author of the monthly index remarked, ”While spending was strong through the end of 2006 and into the first quarter of 2007, real spending has clearly slowed in recent months and will not continue to boost top line GDP growth for some time going forward. The large amount of housing inventory will keep downward pressure on home prices and gas prices are expected to continue at high levels. On the positive side, the growth in the tax burden on households has slowed, the labor market continues to be robust and, even in the face of rising gas prices, real wages are fairly strong. In this environment, retailers should take a cautious approach — keeping inventories lean and staffing at reasonable levels.” The index, comprising four components — tax burden, initial unemployment claims, real wages and real home prices — rose slightly to 2.86 percent, from a downwardly revised gain of 2.75 percent a month ago.

Stacy Janiak, U.S. Retail Leader at Deloitte offered, ”With shoppers becoming hesitant about spending, it would be wise for retailers to be sure the customer experience is top notch. This means focusing on service levels and in- stock positions of the right products, so that browsers can be converted into buyers.”

Highlights of the index, which tracks consumer cash flow as an indicator of future consumer spending, include: — Tax Burden: After accelerating earlier in the year, the growth in the tax burden on households has slowed. Some of the growth earlier in the year can be attributed to increased IRS efficiency in processing claims. Nonetheless, tax receipts are still up 7.5 percent over the past year. — Initial Unemployment Claims: The labor market showed modest signs of improvement in the most recent month as claims fell from a year ago. That companies are willing to hold onto workers even in the face of sluggish overall growth is an indication that businesses expect the pace of growth to pick up in the near future. — Real Wages: Rising gas prices are taking a toll on real wages. Even with a tight labor market, the gain in wages has not been enough to offset the even faster rise in gasoline prices. The sharp run up in gasoline prices is a major headwind to current and future growth in the Deloitte Index. — Real Home Prices: New home prices have fallen sharply in recent months as builders aggressively discount in order to move their excess inventories. With the inventory of new and existing homes near record levels, housing prices will likely continue to exhibit weakness.

Deloitte and Touche USA LLP is the member firm of Deloitte Touche Tohmatsu, and services are provided by the subsidiaries of Deloitte and Touche USA LLP. The subsidiaries of the U.S. member firm are among the nation’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through nearly 30,000 people in more than 80 cities.

To learn more, please visit: www.deloitte.com.

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