According to two different reports, both consumer and business confidence in the economy is weak .

The Deloitte Consumer Spending Index, which tracks consumer cash flow to predict future consumer spending, declined in May while initial unemployment claims rose sharply. The index consists of four components- tax burden, initial unemployment claims, real wages, and real home prices- and dropped to 2.66 percent from 3.29 percent in April.

According to the Index, the tax burden increased slightly, initial unemployment claims increased significantly, real wages are suffering, and real home prices remain in decline.

Carl Stedtmann, Cheif Economist at Deloitte, believes that rising costs for food and energy, along with insecurities in the job market, restrict the average consumer's spending.

The Grant Thornton LLP's most recent Business Optimism Index, a quarterly survey of U.S. business leaders, found 45 percent of respondents believe the U.S. economy will improve within six months, and only 40 percent plan to increase staff.

The index focuses on how business leaders perceive three economic measures for the next six months: the U.S. economy, business growth, and hiring expectations.

Stephen Chipman, CEO at Grant Thornton LLP said that business leaders show concern due to such factors as high energy costs, Japanese manufacturing disruptions, and a high corporate tax rate in the U.S.

Chipman said tax reform is needed to "benefit the dynamic businesses that are the backbone of American economic growth and the driving force behind expanding unemployment."

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