Atlanta-based credit counseling agency CredAbility (formerly CCCS Atlanta) has released its Consumer Distress Index results for the second quarter. The index, which tracks the financial condition of the average U.S. household, finds that high levels of unemployment and the strain of housing costs continue to keep consumers mired in financial distress. But consumers' net worth has increased for the past five quarters as they continue to pay down debt and, in some parts of the country, benefit from stabilizing housing prices.
For the quarter ended June 30, American households scored a 65.2 on the index's 100-point scale – up from 65 in the first quarter of the year, but still below the score of 66.5 for the same period one year ago. A score below 70 indicates a state of financial distress.
The average U.S. consumer has been in financial distress for eight consecutive quarters, according to the index.
‘The modest improvements we see in housing and net worth show incremental, but positive signs of stabilization,’ says Mark Cole, CredAbility's chief operating officer. ‘But to use a medical analogy, the patient is still in critical condition. Until housing and employment markets improve significantly, we cannot expect to see significant recovery in these numbers.’
For the first time, CredAbility is also releasing consumer distress scores for all 50 states and the District of Columbia. The second-quarter data reveals stark regional differences. Only nine states, primarily in the upper Midwest and Great Plains, achieved scores above the distress threshold of 70 points.
Among the states, Nevada posted the worst score on the index, with a 59.23, followed by Mississippi (60.62), Florida (61.01), Michigan (61.01) and South Carolina (61.29). North Dakota had the best performance, with a score of 78.95. To see a detailed explanation of how the index works and a national map, go to CredAbility.org/ConsumerDistressIndex.