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Americans' Financial Woes Fall to 4-Year Low
YONKERS, N.Y. -- The Consumer Reports Index, a measure of Americans' overall personal financial health, shows they are reporting significantly fewer troubles. The index's trouble tracker measure fell sharply to 34 from 41.7 a month earlier -- the lowest level since the organization began measuring it in April 2009.
The Consumer Reports trouble tracker has dropped more than 50% from its high-water mark in September 2009, when it reached 68.7. The greatest drop in financial difficulties over the past 30 days was among those in households earning less than $50,000, followed by the most affluent in homes with income of $100,000 or more. Amid this general drop in financial difficulties, middle-income Americans experienced a slight rise in their financial troubles.
"The data offer a glimpse that consumers may be starting to see and feel the progress of the economic recovery," said Ed Farrell, director of consumer insight at the Consumer Reports National Research Center.
The index's trouble tracker measure focuses on both the proportion of consumers who have faced difficulties as well as the number of negative events they have encountered. Negative events include the inability to pay medical bills or afford medication; missed mortgage payments; home foreclosures; interest-rate increases, penalty fees, reduced lines of credit or other changes in credit-card terms; job losses; reduced health-care coverage; and, the denial of personal loans.
The index's sentiment measure declined 1.9 points to 52.6 from its high point of 54.5 last month, but overall remains in positive territory. The drop was attributed to a decline in two segments: consumers in households earning less than $50,000 (-2.8), and those with a high school education or less (-4.7).
The employment measure showed that job gains outpaced job losses for the third straight month. The employment measure was little changed this month, rising slightly to 50.6 from 50.3 a month earlier.
This uptick was attributed to an increase in the proportion of Americans starting a new job in the past 30 days and that job gains outpaced job losses by a widening margin. The only group that shed more jobs than it gained was those with a high school education or less.
"Despite the improvements, consumers are still frigid about robust spending," Farrell noted. "We are watching closely waiting to see how long it will take them to thaw out from the mindset created by the conditions of the past five years."
The Consumer Reports Index's past 30-day retail measure halted four straight months of decline, trending upward to 9.2 from 8.7 a month earlier. Among the retail categories the index tracks, the gain was driven primarily by a large seasonal rise in the major lawn and garden equipment category, and a small uptick in major appliances.
The index also shows that consumers remain uncomfortable about robust spending; planned spending for the next 30 days, reflecting potential June activity, is at 6, its lowest level since April 2009.
The level of stress that consumers felt was up slightly to 55.2 from 53.8 last month. The Americans feeling the most stress: women (55.8), those in households earning under $50,000 (57.1), ages 18 to 34 (56.6), and those in the Northeast (57.6).
Published by The Business Journal, Youngstown, Ohio.
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