CredAbility Consumer Distress Index: U.S. Consumers Remain Mired in Financial Distress Amid Some Signs of StabilizationThursday, August 26, 2010

New 50 State Data Shows Stark Regional Differences in Financial Health

ATLANTA, GA – CredAbility, one of the leading nonprofit credit counseling and education agencies in the United States, today released the CredAbility Consumer Distress Index results for the 2010 second quarter. The Index, a quarterly measure that 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, 2010, American households scored a 65.2 on the index’s 100-point scale, up from 65.0 in the first quarter of 2010, yet 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.

For the first time, CredAbility is also releasing consumer distress scores for all 50 states and the District of Columbia. The second quarter 2010 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 at 59.23, while 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 www.CredAbility.org/ConsumerDistressIndex.

“The average American remains gripped by financial distress,” said Mark Cole, CredAbility’s chief operating officer and executive responsible for the CredAbility Consumer Distress Index. “The modest improvements we see in housing and net worth show incremental, but positive signs of stabilization. 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.”

Cole added: “We do find some areas of the country where consumers are more financially stable, but these are in the states that account for only a small portion of the total U.S. population.”

Highlights from the second quarter Index data include:

• The five states with the lowest Index scores were Nevada (59.23), Mississippi (60.62) Florida (61.01), Michigan (61.01) and South Carolina (61.29). Each faces acute challenges in employment and housing markets, which weigh heavily on their overall scores.
• Forty-one states and the District of Columbia continued to score at levels that indicate distress.
• Only nine states, led by North Dakota (78.95) and South Dakota (77.43), scored above the distress threshold of 70 points. Rounding out the top five were Nebraska (76.09), Wyoming (72.80) and Vermont (72.05).
• Collectively, these nine states (also including Iowa, Alaska, New Hampshire and Kansas), account for just 4 percent of the total U.S. population.

Second quarter Index data by state:

 

	Q2 2010	Q1 2010	Q4 2009	Q3 2009	Q2 2009
National	65.23%	65.04%	63.96%	65.23%	66.46%
States	Q2 2010	Q1 2010	Q4 2009	Q3 2009	Q2 2009
Nevada	59.23%	59.16%	59.56%	60.57%	61.52%
Mississippi	60.62%	60.57%	60.69%	61.53%	62.45%
Florida	61.01%	60.70%	60.48%	61.37%	62.60%
Michigan	61.01%	60.69%	60.47%	61.27%	62.08%
South Carolina	61.29%	60.63%	60.09%	60.88%	62.00%
Georgia	61.37%	61.24%	61.13%	62.04%	63.35%
California	61.71%	61.36%	61.29%	62.33%	63.50%
Alabama	61.89%	61.60%	61.46%	62.25%	63.39%
Arizona	62.05%	61.75%	61.62%	62.41%	63.76%
Tennessee	62.26%	61.72%	60.97%	61.70%	62.67%
North Carolina	62.28%	62.11%	61.53%	62.46%	63.58%
Indiana	62.61%	62.27%	61.74%	62.32%	63.10%
Ohio	63.06%	62.60%	62.18%	63.08%	64.06%
Kentucky	63.38%	62.83%	62.03%	62.81%	64.11%
Rhode Island	63.70%	63.33%	63.20%	64.15%	65.35%
West Virginia	64.50%	64.11%	63.39%	64.27%	65.58%
Missouri	64.62%	64.37%	63.97%	64.85%	65.89%
District of Columbia	64.64%	66.07%	65.72%	66.36%	66.36%
Oregon	64.66%	64.29%	63.72%	64.58%	65.77%
Illinois	64.66%	64.45%	64.43%	65.33%	66.54%
Idaho	65.11%	64.51%	64.48%	65.51%	67.28%
Washington	65.60%	65.59%	65.71%	67.06%	68.84%
New Mexico	65.72%	65.64%	65.42%	66.58%	68.50%
Arkansas	65.73%	65.24%	64.54%	65.50%	66.89%
Texas	65.89%	65.82%	65.36%	66.27%	67.55%
Maine	66.04%	65.78%	65.46%	66.55%	67.80%
Delaware	66.96%	66.34%	66.00%	66.92%	68.23%
Pennsylvania	66.99%	66.92%	66.61%	67.59%	68.77%
Louisiana	67.64%	68.13%	68.59%	69.43%	70.30%
Utah	67.65%	67.79%	68.15%	69.02%	70.64%
New Jersey	67.67%	67.42%	67.40%	68.41%	69.50%
New York	67.79%	67.45%	67.35%	68.43%	69.49%
Wisconsin	68.05%	67.48%	66.59%	67.59%	68.85%
Colorado	68.34%	68.31%	68.15%	68.91%	70.12%
Massachusetts	68.37%	68.18%	68.08%	68.98%	70.27%
Oklahoma	68.63%	69.02%	69.10%	70.05%	71.02%
Hawaii	68.65%	67.96%	67.84%	69.11%	70.60%
Maryland	68.94%	68.94%	68.89%	69.94%	71.18%
Connecticut	69.23%	69.04%	68.96%	70.10%	71.57%
Virginia	69.30%	69.16%	69.21%	70.14%	71.37%
Montana	69.51%	69.99%	69.75%	70.96%	73.14%
Minnesota	69.75%	69.01%	68.14%	68.87%	70.06%
Kansas	70.26%	69.79%	69.29%	70.12%	71.28%
New Hampshire	70.64%	69.26%	69.07%	70.16%	71.70%
Alaska	70.70%	70.68%	70.70%	70.92%	72.21%
Iowa	71.40%	70.97%	69.98%	71.08%	72.76%
Vermont	72.05%	71.63%	71.07%	72.30%	73.50%
Wyoming	72.80%	72.83%	72.76%	73.82%	75.75%
Nebraska	76.09%	75.47%	74.20%	75.31%	76.38%
South Dakota	77.43%	77.21%	75.62%	76.91%	78.34%
North Dakota	78.95%	78.89%	79.25%	79.83%	80.58%

About the CredAbility Consumer Distress Index
Published quarterly, the CredAbility Consumer Distress Index uses a proprietary methodology that draws upon multiple data sets. Employment, housing, credit, household budget and net worth information is supplemented with data collected by CredAbility, which serves more than 750,000 financially distressed individuals each year.