Consumer financial stress hits 12-year low
Financial stress and consumer confidence are hitting decade-plus extremes at the same time – but on opposite ends of the spectrum.
US residents haven’t felt this good in more than a decade. After years of economic tumult and slow recovery, two indicators that measure the nation’s financial health are hitting multi-year records.
The Consumer Financial Stress Index just hit its lowest point in 12 years after accounting for last month’s data, which was announced Wednesday on the heels of a 17-year high for the Consumer Confidence Index.
The Consumer Financial Stress Index is one of five parts to the LegalShield Law Index, a measure of the health of the US economy based on demand for and use of legal services. It dropped from 90.8 to 86.5 year-on-year.
The Consumer Confidence Index is produced for The Conference Board through a random-sample survey conducted by Nielsen. It peaked in October at 125.9, just shy of December 2000’s 128.6.
“Consumers are right to be confident right now, as consumer financial stress is at a 12-year low,” LegalShield chief commercial officer James Rosseau said. “As in previous months, however, we believe confidence is a bit overstated, as demonstrated by the inconsistent consumer spending data we’ve seen this year.”
That’s because consumer spending and retail sales haven’t grown any faster than last year, but confidence is up 11% so far in 2017.
“Consumers’ assessment of current conditions improved, boosted by the job market which had not received such favorable ratings since the summer of 2001,” Conference Board director of economic indicators Lynn Franco said.
“Consumers were also considerably more upbeat about the short-term outlook, with the prospect of improving business conditions as the primary driver. Confidence remains high among consumers, and their expectations suggest the economy will continue expanding at a solid pace for the remainder of the year.”
How much expansion is the question, and the holiday shopping season could hold some answers.
“We’ll be monitoring the holiday shopping season closely, as many economists expect consumer spending to receive a temporary post-hurricane boost due to federal recovery efforts,” Rosseau added.
Black Friday is the biggest shopping day in the United States but many retailers have already begun their holiday sales this season. Explore deals and check out our guide to discover all the Black Friday deals of 2017.
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