Deloitte Research Leading Index Rises; Volatility Creates Continued Uncertainty About Consumer Spending

 The Deloitte Research Leading Index of Consumer Spending rose this month due to improvements in several components.

'The index continues to show signs of volatility in 2007,' says Carl Steidtmann, chief economist with Deloitte Research and author of the monthly index. 'While home prices and gas prices continue to cloud the outlook, new home prices rebounded in September, the labor market showed modest signs of improvement, and the growth in the tax burden on households has slowed. We continue to believe that consumer spending over the next several months will reflect the current economic uncertainty. However, while the holiday season may not be as good as some hope, it does not look like it will be as bad as many have feared.'

The index, comprising four components -- tax burden, initial unemployment claims, real wages and real home prices -- rose to 3.45 percent, from an upwardly revised loss of 3.17 percent a month ago.

'The Deloitte 22nd Annual Holiday Survey told us that 44 percent of consumers planned to start their holiday shopping by the end of October, and many retailers have already introduced early price cuts and promotions - but there is certainly much shopping left to do,' says Stacy Janiak, Deloitte`s U.S. Retail Leader. 'Americans continue to be in a giving mood, but appear to be more restrained when it comes to personal indulgences this year. Therefore, retailers who can entice consumers to splurge by giving them a reason to buy that extra gift for themselves will capture more share of wallet during this critical holiday season.'

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.  Nonetheless, tax receipts are
      still up 6.1% 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.  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 rebounded in September, even as the
      overall housing market continued to deteriorate. Home mortgage equity
      extraction has fallen from its peak but is still surprisingly strong
      equaling 5% of real disposable income in the third quarter.

For more information about Deloitte`s Retail group, please visit www.deloitte.com/us/retail. For more information about Deloitte`s Annual Holiday Survey, including interesting statistics, historical data and useful links, please visit www.deloitte.com/us/2007HolidaySurvey.

About Deloitte

As used in this document, 'Deloitte' means Deloitte & Touche USA LLP. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte & Touche USA LLP and its subsidiaries.

  Laura E. Wilker            Meredith Kish
  Deloitte                   Hill & Knowlton
  (212) 492-2871             (212) 885-0329
  lwilker@deloitte.com       meredith.kish@hillandknowlton.com

Source: Deloitte

CONTACT: Laura E. Wilker of Deloitte, +1-212-492-2871,
lwilker@deloitte.com, or Meredith Kish of Hill & Knowlton for Deloitte,
+1-212-885-0329, meredith.kish@hillandknowlton.com

Web site: http://www.deloitte.com/us
http://www.deloitte.com/us/2007HolidaySurvey
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