If you think Americans are more uptight than ever about the state of their finances, think again. A new poll shows consumers are less stressed about credit cards, mortgages, home equity loans, car and student loans and other sources of debt.
The Consumer Debt Stress Index, calculated by Ohio State's Center for Human Resource Research, fell 10 percent last month, after hitting record highs during the summer. "Reports on the economy have become more encouraging, with the retail and housing sectors showing renewed signs of life," said Lucia Dunn, professor of economics at Ohio State University and one of the leaders of the study.
"Consumers are feeling less anxious than they did, but high levels of debt stress on consumers are still troubling," Dunn said, adding that stress combined with the length of the current recession, which began in December 2007, have affected Americans' views on their well-being.
About 26 percent respondents to the September DSI sampling said debt has affected their health to some extent -- an increase of three percent since a year ago.
About 10 percent of those asked said debt has been an "extreme problem" for their family life, and six percent said it has been an extreme problem for their job performance -- both substantial increases over the same period last year.
The survey found women were more affected by debt stress than men, with women's debt stress about 34 percent higher than men, with the same level of debt to income.
Debt stress has been on the rise since the fall of 2007 when the DSI rose above the 100 mark, a benchmark number established in January 2006, two months after the center first began conducting the survey. The index hit 155.3 in July of this year -- 55 percent higher than the debt stress levels on consumers in January 2006 and the highest it has been since the index's inception.
The stress score fell to 132.8 in September following a 5-percent drop to 147.6 in August. Each month's index score is based on the past three months of interviews, with the average sample size being 658. It is based on telephone interviews of randomly selected Americans
High levels of consumer debt could imperil for the rapidly advancing holiday shopping season, Dunn said. "People may still be cautious with their spending, especially if unemployment continues to be high as has been forecast by many economists."
A recent survey by the National Retail Federation revealed consumers expect to spend 3.2 percent less on gifts and other holiday purchases than last year -- the first such cutback shoppers have signaled since 2002, Reuters reported. According to the NRF survey released last week, U.S. consumers said they will spend an average of $682.74 on holiday shopping this year, down 3.2 percent from $705.01 last year.
Still deep in debt, but consumers are feeling a bit less stressed