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Consumer Reports Index: Middle-income Americans report increase in financial troubles

Consumer Reports Index: Middle-income Americans report increase in financial troubles

Financial difficulties rose last month for middle-income households, according to the Consumer Reports Index, an overall measure of Americans’ personal financial health.

The monthly Index comprises five measures: Employment, Retail, Sentiment, Stress, and the Trouble Tracker.

The Trouble Tracker, a measure of financial difficulties, climbed to 37.5 from 32.7 for middle-income Americans. Missed payments on a major bill (other than mortgage) and the inability to afford medical bills or medications were the two Trouble Tracker areas that saw the greatest increase. The Trouble Tracker remained unchanged overall because financial woes moderated for lower- and upper-income households.

“Middle-income Americans were particularly hard hit this month and appear to be losing ground,” says Ed Farrell, director of consumer insight at the Consumer Reports National Research Center. “It’s hard to imagine a scenario that will create significant improvements in confidence until consumers feel their employment outlook is improved.” While 4.4 percent of survey respondents reported finding a job in January, 5.5 percent said they lost a job last month.

Additional findings from the Consumer Reports Index:

  • While 4.4 percent of survey respondents reported gaining a job, 5.5 percent reported losing a job. Yet overall, employment halted two months of decline, rising slightly to 49.4 from 48.8 a month earlier.
  • Retail fell compared with a year ago, to 10.5 from 11.8. The decline in spending was most pronounced among those earning $100,000 or more. Planned spending among all groups for the next 30 days was weak (6.7) and stood at its lowest since April 2009, when the Index launched.
  • Consumer sentiment declined, to 48.9 from 51.2, led by weakening confidence among lower- and middle-income Americans. Only those in households earning $100,000 or more had an improved outlook.
  • Consumers’ stress level was unchanged from the previous month, remaining at 55.9.

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The Consumer Reports Index, a monthly telephone poll of a nationally representative sample of Americans, is conducted by the Consumer Reports National Research Center. A total of 1,011 interviews were completed January 24-27, 2013. The margin of error is +/- 3.2 percentage points at a 95 percent confidence level.

Previously: Middle-income Americans remain cautious spenders

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