First-Quarter Data Show Consumer Distress Beginning to Ease

The nonprofit counseling agency ""CredAbility"":http://www.credability.org released the results of its first-quarter Consumer Distress Index Thursday.

While the average U.S. household is still in financial distress, and has been for 10 consecutive quarters, the agency says the index has hit its highest score in two and a half years, signaling the level of distress is beginning to ease.
[IMAGE] CredAbility’s index is a quarterly measure that tracks the financial condition of the average American. For the first three months of this year, U.S. households scored a 68.15 on the agency’s 100-point scale. That’s up from 67.2 in the fourth quarter of 2010. A score below 70 indicates a state of financial distress.

CredAbility attributed the positive movement to the fact that employment levels rose and consumers now have a better handle on managing household budgets. On the flip side, the score dropped in the housing category, reflecting minimal improvements in mortgage delinquencies.

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The index measures financial health in five categories: employment, housing, credit, household budgets, and net worth. Housing is the only one of the five gauges that continues to deteriorate.

Even with housing woes weighing heavy on American’s fiscal wellbeing, CredAbility says overall, the financial picture for U.S. households improved in 2011’s first quarter.

“I believe a new trend is emerging,” said Mark Cole, COO of the Atlanta-based counseling organization. “Our index has increased by four points in the last five quarters, an indication that the average U.S. household is getting financially healthier [and] that the majority of consumers are on the right track.”

The index also measures the ""financial distress level"":http://www.credability.org/en/about-credability/media-center/Consumer-Distress-Index/default.aspx of all 50 states and the District of Columbia.

Among individual states, Nevada had the lowest score at 60.8, followed by Georgia, Michigan, Florida, and Arizona â€" all states continuing to suffer from severe unemployment and housing problems.

CredAbility noted, however, that its latest results marked the first time in the past seven quarters that Nevada has scored above 60.

California, the nation’s most populous state, raised its score for the sixth consecutive quarter to 65.19. The state now ranks 11th among the most distressed states.

North Dakota and South Dakota continue to have the highest scores of all the states, at 82.35 and 81.23 respectively.