First, there is a misconception about 'evergreen' trees never losing needles. Generally, it is on a 2-3 year cycle. The needles dropped, tend to be the ones closer to the trunk. If it is excessive, there may be cause to worry. This link from Kansas has good information: http://www.hfrr.ksu.edu/doc1670.ashx

Young trees should get the equivalent of 1 inch of water a week through the growing season and a 2-3 inch layer of mulch will prevent the water from evaporating too quickly. Too much mulch can prevent water from getting to where the plant's roots can reach it.  It should be a thorough watering rather than several light waterings which could make the roots too shallow.  The fact sheet indicates that spruce don't tend to need fertilizer.   It is important to follow the directions on the container (if you choose to fertilize) to make sure you don't over fertilize, as spruce tend to have shallow root systems. Continue to keep an eye on your spruce.

Good Luck