For the first time since January, consumer spending rose on a month-over-month basis, according to a new study from a private professional services organization.
In its index that tracks consumer cash flow, Deloitte said spending increased in July, primarily as a result of real wages improving and home prices going up.
"The housing market is showing multiple signs of stabilizing and that is helping to ease a significant drag on consumer spending," said Carl Steidtmann, chief economist for Deloitte. "A decline in energy prices drove an increase in real wages, perhaps giving consumers more money to spend and restoring confidence despite a weak labor market and the recent debt ceiling debate."
The index — which measures tax burden, unemployment claims, wages and home prices — increased from 2.49 in June to 2.53 in July.
With income earnings rising, consumers have more money to spend and pay off their debts. If debt levels are high, this can adversely affect credit, diminishing consumers' ability to buy at a low interest rate. Debts listed on a credit report may be erroneous, however. A credit attorney may be able to spot such questionable notations and offer a credit solution.