Consumer Distress Continues Despite National GDP Growth

The average U.S. household has experienced financial distress for 10 consecutive quarters, and the health of the average household budget has declined for the past six.

A recent report from nonprofit credit counseling and education agency CredAbility includes its fourth quarter Consumer Distress Index findings. While the index shows rising stock prices helped the growth of consumers’ net worth, it posted lower scores for employment, housing and the health of household budgets are at its lowest level since the first quarter of 2009.

Despite 3% GDP growth in 2010, CredAbility’s findings show the economic growth has not carried to the household level in the U.S.

“The increase in the GDP in the fourth quarter and 2010 has not yet translated into improved financial health for many average American families,” said Mark Cole, CredAbility’s CEO and the executive responsible for the CredAbility Consumer Distress Index.

A state of financial distress is determined by an index score lower than 70 on CredAbility’s 100-point index scale. In the fourth quarter, the index posted a score of 64.3, down slightly from a score of 64.4 in the preceding quarter. The last time the index showed a score above 70 was in the second quarter of 2008.

On the state level, seven states posted index scores above 70. Those were North Dakota (79.35), South Dakota (76.94), Nebraska (74.84), Wyoming (74.09), New Hampshire (72.3), Vermont (71.3) and Iowa (70.05).

Michigan suffered the worst according to the index, with a score of 58.83. Other states still well below the distress line include Mississippi (59.24), Nevada (59.27), Alabama (60.03) and Florida (60.21).

For more information on the Consumer Distress Index, visit

Written by Elizabeth Ecker


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