The Deloitte Consumer Spending Index rose for the second consecutive month in April and remains at its highest level in six years. The Index attempts to track consumer cash flow as an indicator of future consumer spending.

"In April, the Index continued to benefit from an improved employment picture, and for the first time since the spring of 2007, the housing market was a positive contributor to the Index," said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP, and author of the monthly Index. "While real wages have been deteriorating due partly to inflation, any negative effect is being offset by strength in other components of the Index. Tax rates are at historically low levels; however, should proposed tax increases materialize in the months ahead, they may begin to drag on the Index."

The Index, comprising four components ― tax burden, initial unemployment claims, real wages and real home prices ― rose to 5.0 percent, from an upwardly revised gain of 4.64 percent a month ago.

"While consumers appear to be re-energized, retailers are likely to find that shoppers are navigating the physical and virtual retail space much differently than they did prior to the recession," said Stacy Janiak, vice chairman and Deloitte's retail leader in the United States. "Investments in improving the customer experience across all channels, via store remodels or more seamless multi-channel technology, may benefit retailers as they prepare for the back-to-school and holiday selling seasons. Retailers should also consider shifts in their marketing and advertising spend to a cost-effective mix of visual merchandising and mobile and social media marketing to reach target customers both in-store and online."

Highlights of the Index include:

Initial Unemployment Claims: The employment cycle has turned around. Employment has risen for three of the last five months, and with companies now hiring, new unemployment claims are likely to continue shrinking in coming months.

Real Wages: Real wages, which just a few months ago were contributing to the Index's improvement, have recently been deteriorating. Real hourly earnings declined for the third consecutive month. Nominal wages (not adjusted for inflation) have been flat in recent months, and slightly higher inflation is causing the decline in real wages.

Real Home Prices: Home buyers are being enticed by the tax credits that are coming to a close. Thus, home sales have recently improved. With demand firming, real home prices rose for the first time since the spring of 2007.

Tax Burden: The consumer's tax burden declined sharply through most of the recession. In early 2010, however, the rate has basically held steady. It remains at a historically low level.