Three Years into Economic Recovery, Consumers’ Household Budgets Are Again Under Stress, Finds CredAbility Consumer Distress Index

ATLANTA, GA – May, 15, 2013 – More than three years into the economic recovery, American household budgets are again under stress, stifling financial progress for the average U.S. household, according to the latest findings of the CredAbility Consumer Distress Index.

The newest causes for concern are the significant drops in the savings rate and consumer sentiment, which crimped consumers’ budgets in 2013’s first quarter. The problems in households’ ability to save more than offset gains in employment, housing, credit and net worth, a category that reached a level not seen since 2008’s fourth quarter. Improvements in these four categories, compared to the 2012 fourth quarter, were enough to barely keep the average U.S. household out of financial distress for the fourth consecutive quarter.

In the first quarter, U.S. households scored 70.7 on the Index’s 100-point scale, down 1.1 point from the previous quarter. A CredAbility Consumer Distress Index score below 70 indicates a state of financial distress. Over the past four quarters, the index has alternated moving up and down, resulting in an increase of less than one point.
“Despite the growth in jobs and an improved housing market, our index shows that the average U.S. household has seen little improvement in the past year and took a step back in 2013’s first quarter,” said Phil Baldwin, chief executive officer for CredAbility. “The jump in Social Security taxes in January forced people to save and spend less compared to the previous quarter. With nearly 49 million people on food stamps and almost 12 million still unemployed, there are still a lot of challenges facing many families.”

Four of the index’s five categories rose during the quarter. The credit category exceeded 90 for the first time in 24 years, a clear sign that consumers continue to pay their credit cards and other consumer loans on time. The net worth category, while remaining well below 70, reached its highest point since the beginning of the financial crisis and has risen nearly five points in just over four years.

The quarterly index is published by CredAbility, one of the nation’s leading nonprofit credit counseling and education agencies. It tracks the financial condition of the average U.S. household by measuring five categories: employment, housing, credit, how families manage household budgets and net worth.

State and Local Results

The index has a national score and rankings of all 50 states and 77 of the largest Metropolitan Statistical Areas (MSAs).

The index has a national score and rankings of all 50 states and 77 of the largest Metropolitan Statistical Areas (MSAs).

At the state and local levels, Florida was the only state to eke out a gain during the quarter following improvements in employment and mortgage delinquency rates in Tampa, Orlando and Jacksonville. However, Orlando households continued to be the nation’s most financially distressed large MSA for the third consecutive quarter, followed by Riverside, Calif., Tampa, Miami and Charlotte. Among the 30 largest MSAs, households in Minneapolis-St. Paul, Boston, Washington, D.C., Houston and Dallas were the five with the healthiest finances.

The pain caused by the drop in savings and disposable income was widespread, with 21 states scoring below 70 on the index, up from 13 in the previous quarter. Households in large states, such as California, Pennsylvania and Ohio, dropped below 70 in the most recent quarter. While Florida remained in distress, it was the only state in the nation to improve compared to the previous quarter, moving from 68.6 to 68.8.

Tampa, Orlando, Detroit Only Gainers Among Top 30 Markets

Only three of the 30 largest MSAs scored higher in the first quarter than in 2012’s fourth quarter, with Tampa showing the strongest increase, up 1.4 points. Tampa experienced significant improvements in its unemployment and mortgage delinquency rates, with unemployment falling from 8.1 percent to 7.5 percent and mortgage delinquencies dropping from 12.1 percent to 10.7 percent. Orlando and Detroit were the only other large cities to show gains, though both rose only .1 points on the index.

Pittsburgh recorded the largest decrease for the quarter, dropping 3.2 points and falling below 70 to 69.4 and into financial distress. Other major cities to fall into financial distress during the quarter were Portland (-2.8 points to 69.3); St. Louis (-2.2 points to 68.9); Cincinnati (-1.8 points to 69.8) and Phoenix (.6 points to 69.6).

Omaha Scores Highest Mid-Sized MSAs

Omaha continued to have the nation’s highest score and was the only city above 80, rising .2 points to 80.5. Among MSAs with 2 million and less in population, the next highest scores were Salt Lake City, 76.9; Honolulu, 76; Austin, 75.6 and Oklahoma City, 75.5. Cities in this category with the lowest scores were Las Vegas, 61.5; Fresno, 62.1; McAllen, Tex., 63.5; Bakersfield, Calif., 63.7, and Memphis, 64.8.

2013 first quarter CredAbility Consumer Distress Index data by MSA:

Q1 2013

Q4 2012

Q3 2012

Q2 2012

Q1 2012

National

70.73%

71.77%

70.48%

71.25%

69.94%

MSA

Orlando-Kissimmee-Sanford, FL

62.04%

61.91%

59.71%

59.47%

58.31%

Riverside-San Bernardino-Ontario, CA

62.08%

63.11%

60.81%

60.15%

59.69%

Tampa-St. Petersburg-Clearwater, FL

64.14%

62.67%

60.74%

60.13%

59.51%

Miami-Fort Lauderdale-Pompano Beach, FL

64.30%

65.54%

62.52%

63.09%

63.08%

Charlotte-Gastonia-Rock Hill, NC-SC

64.70%

68.17%

65.46%

66.36%

65.67%

Chicago-Joliet-Naperville, IL-IN-WI

65.41%

68.22%

65.65%

67.10%

66.33%

Atlanta-Sandy Springs-Marietta, GA

65.78%

67.19%

66.76%

66.40%

64.46%

Sacramento–Arden-Arcade–Roseville, CA

66.06%

66.99%

64.74%

64.66%

63.33%

Detroit-Warren-Livonia, MI

66.08%

65.98%

62.34%

63.69%

61.70%

Cleveland-Elyria-Mentor, OH

66.98%

69.47%

68.43%

68.00%

66.05%

Los Angeles-Long Beach-Santa Ana, CA

67.74%

68.89%

66.40%

66.36%

64.97%

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

68.16%

68.98%

67.06%

68.43%

67.28%

St. Louis, MO-IL

68.93%

71.19%

70.63%

69.01%

66.62%

Portland-Vancouver-Hillsboro, OR-WA

69.26%

72.14%

69.65%

69.87%

68.53%

San Diego-Carlsbad-San Marcos, CA

69.43%

69.85%

67.57%

67.10%

65.78%

Pittsburgh, PA

69.44%

72.64%

70.77%

71.92%

70.41%

Phoenix-Mesa-Glendale, AZ

69.56%

70.15%

68.29%

68.93%

65.19%

Cincinnati-Middletown, OH-KY-IN

69.81%

71.61%

69.32%

69.93%

67.66%

New York-Northern New Jersey-Long Island, NY-NJ-PA

70.43%

72.42%

70.80%

71.30%

70.66%

Baltimore-Towson, MD

70.47%

72.48%

70.46%

69.83%

68.33%

Seattle-Tacoma-Bellevue, WA

70.67%

71.21%

68.27%

69.16%

67.78%

San Antonio-New Braunfels, TX

72.35%

74.51%

71.69%

70.61%

69.41%

San Francisco-Oakland-Fremont, CA

73.22%

73.55%

70.84%

70.47%

69.10%

Kansas City, MO-KS

73.40%

73.74%

70.75%

71.55%

70.51%

Denver-Aurora-Broomfield, CO

74.56%

75.22%

72.64%

72.80%

71.35%

Dallas-Fort Worth-Arlington, TX

74.69%

74.98%

73.49%

73.41%

71.86%

Houston-Sugar Land-Baytown, TX

74.99%

76.04%

73.61%

72.36%

71.01%

Washington-Arlington-Alexandria, DC-VA-MD-WV

77.07%

79.23%

76.78%

77.14%

76.00%

Boston-Cambridge-Quincy, MA-NH

77.39%

79.07%

76.17%

77.42%

75.18%

Minneapolis-St. Paul-Bloomington, MN-WI

78.25%

80.12%

76.70%

76.97%

74.48%

MSA

Las Vegas-Paradise, NV

61.47%

62.66%

60.75%

62.10%

61.14%

Fresno, CA

62.12%

64.16%

62.92%

62.68%

61.35%

McAllen-Edinburg-Mission, TX

63.54%

64.84%

63.10%

63.82%

62.33%

Bakersfield-Delano, CA

63.66%

64.47%

62.99%

62.55%

61.22%

Memphis, TN-MS-AR

64.75%

66.96%

65.46%

65.31%

64.65%

Greensboro-High Point, NC

64.87%

66.84%

64.81%

65.15%

64.50%

North Port-Bradenton-Sarasota, FL

64.88%

65.67%

62.65%

63.01%

62.06%

Jacksonville, FL

65.16%

65.34%

62.14%

63.12%

61.22%

Dayton, OH

65.68%

66.80%

64.02%

66.29%

64.53%

Greenville-Mauldin-Easley, SC

65.90%

69.24%

68.27%

67.02%

67.53%

Allentown-Bethlehem-Easton, PA-NJ

65.95%

67.59%

66.32%

67.02%

66.16%

Tucson, AZ

66.81%

68.93%

66.17%

66.64%

66.22%

Columbia, SC

66.96%

68.42%

66.42%

66.15%

66.13%

Jackson, MS

67.06%

68.39%

68.12%

68.88%

68.16%

Indianapolis-Carmel, IN

67.22%

69.73%

69.18%

68.23%

65.66%

Providence-New Bedford-Fall River, RI-MA

67.49%

69.30%

67.37%

67.69%

65.03%

Buffalo-Niagara Falls, NY

67.61%

68.38%

66.56%

67.96%

68.31%

Albany-Schenectady-Troy, NY

67.95%

70.71%

68.14%

69.77%

68.77%

New Haven-Milford, CT

67.98%

68.97%

67.08%

68.05%

66.26%

Rochester, NY

68.09%

70.35%

68.90%

70.05%

69.14%

Albuquerque, NM

68.21%

71.22%

68.44%

69.40%

68.15%

El Paso, TX

68.35%

69.46%

67.95%

68.69%

67.39%

Akron, OH

68.44%

70.40%

68.63%

66.83%

66.84%

Milwaukee-Waukesha-West Allis, WI

68.55%

70.95%

70.94%

70.80%

69.49%

Worcester, MA

68.84%

72.46%

70.00%

71.18%

69.66%

Little Rock-North Little Rock-Conway, AR

69.00%

71.85%

71.26%

70.99%

69.94%

Hartford-West Hartford-East Hartford, CT

69.24%

71.68%

69.76%

70.90%

70.23%

New Orleans-Metairie-Kenner, LA

69.30%

71.51%

66.86%

66.62%

66.74%

Knoxville, TN

69.43%

74.04%

71.38%

70.64%

69.65%

Oxnard-Thousand Oaks-Ventura, CA

69.90%

70.10%

67.84%

68.11%

66.18%

Columbus, OH

69.98%

72.76%

70.59%

69.96%

67.15%

Grand Rapids-Wyoming, MI

70.39%

73.13%

70.21%

69.85%

67.91%

Louisville/Jefferson County, KY-IN

70.56%

70.92%

69.05%

68.82%

67.30%

Virginia Beach-Norfolk-Newport News, VA-NC

70.72%

72.75%

69.84%

69.02%

69.73%

Raleigh-Cary, NC

70.78%

72.02%

67.93%

69.27%

69.17%

Baton Rouge, LA

71.02%

73.50%

69.28%

69.75%

68.91%

Birmingham-Hoover, AL

71.29%

70.91%

70.02%

69.69%

68.42%

Bridgeport-Stamford-Norwalk, CT

71.88%

73.44%

71.22%

70.44%

71.37%

Tulsa, OK

72.52%

76.45%

74.15%

73.84%

71.05%

Richmond, VA

72.69%

71.02%

68.12%

69.74%

67.85%

Nashville-Davidson–Murfreesboro–Franklin, TN

72.69%

74.94%

72.49%

70.33%

70.63%

San Jose-Sunnyvale-Santa Clara, CA

74.66%

74.61%

71.46%

70.94%

69.32%

Oklahoma City, OK

75.53%

76.63%

74.99%

76.25%

75.17%

Austin-Round Rock-San Marcos, TX

75.60%

76.47%

75.36%

74.27%

73.00%

Honolulu, HI

76.06%

76.04%

74.81%

73.95%

73.58%

Salt Lake City, UT

76.86%

78.58%

75.85%

75.30%

73.92%

Omaha-Council Bluffs, NE-IA

80.51%

80.27%

79.18%

79.59%

78.08%

About the CredAbility Consumer Distress Index

Once published quarterly, the CredAbility Consumer Distress Index used a proprietary methodology that drew upon multiple data sets. Employment, housing, credit, household budget and net worth information was supplemented with data collected by CredAbility, which served approximately 300,000 financially distressed individuals in 2012.