Increasing financial troubles for consumers and a weak retail outlook persisted this month, according to the Consumer Reports Index July report.
The report also showed that consumer sentiment remained in negative territory as a stagnant job market kept consumers cautious about spending. The Consumer Reports Index report comprises five key indices: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index, and the Employment Index.
The Consumer Sentiment Index, which measures how consumers are feeling financially when compared with a year ago, rose slightly to 48.5 from the previous month’s index, but it continues to lag in negative territory. Senior citizens and households earning less than $50,000 have the weakest consumer sentiment. Northeastern states had the most improved sentiment, but were still negative at 48.1.
"The economy is treading water and really hasn’t shown any momentum toward recovery," Ed Farrell, a director at Consumer Reports National Survey Research Center. , said in a statement. "Consumers remain cautious, especially households with income less than $50,000, who have been hurt the worst and face the biggest stresses regarding jobs, unpaid bills, and health care access and affordability."
• Nationwide, the Consumer Reports Trouble Tracker showed consumers were facing more money problems than the prior month, but the problems are not as severe as a year ago.
• July’s Consumer Reports Stress Index found that consumers have nearly the same degree of stress as they had the prior month.
• Consumer Reports Sentiment Index was up slightly from last month (46.2) and is comparable to one year ago at 45.2.
• The most optimistic consumers: age 18-34 at 62.2, and households with income of $100K or more at 56.9. The most pessimistic consumers: households with income less than $50,000 (44.2) and those who are age 65 and older (38.7).
• The Consumer Reports Trouble Tracker Index increased to 50.6 in July from 48.6 in June, affected by missed payments on major bills and loan denials as the most significant changes. The Trouble Tracker Index is still down substantially from last year’s 57.6.
• The financial difficulties that were on the rise in the past 30 days were led by missed payments on major bills at 8.7%, an increase from 7.1% in June. Overall, the most prevalent consumer trouble remains the inability to afford medical bills or medications at 13.3%, down from 14.0% last month.
• Lower-income households, earning less than $50,000 a year, have been disproportionately affected. In the past 30 days: 21.4% unable to afford medical bills or medications; 16.0% missed payment on a major bill (not a mortgage); and, 9.3% lost or reduced health-care coverage.
• The Consumer Reports Retail Index shows that consumer retail behavior is weak. June activity, is 10.2, down from 12.0 the prior month. The Consumer Reports Next 30-Day Retail Index, reflecting planned purchasing in July, is also down, 7.7 versus 9.0 the prior month.
• The Consumer Reports Employment Index increased fractionally to 50.8 from 50.0, a month ago. As part of an ongoing trend, the hardest hit consumers by the stagnant Employment Index were those in households earning less than $50,000, who had the highest proportion of job losses. Overall in the past 30 days, 6.3% have started a new job, up from 5.3% a month earlier, and job losses were down slightly at 4.8% from the 5.4% reported the prior month.