Dollars & Sense

Kansas City area consumer stress index improves

Updated: 2013-05-15T03:14:32Z

By DIANE STAFFORD

The Kansas City Star

A national measure of financial stress on households indicates that Kansas City area consumers are in slightly better shape than they were a year ago.

The CredAbility Consumer Distress Index, released today, gives the Kansas City area a stress index of 73.4 in the first quarter this year, compared with 70.5 in the first quarter of 2012.

A rating below 70 is considered an indication of household financial stress.

The proprietary index, designed by the nonprofit credit counseling agency, also ranks the Kansas City area the seventh least stressed among the nation’s 30 largest metropolitan areas.

The relatively strong rating puts Kansas City in good company, between San Francisco, at an index of 73.22, and Denver at 74.56.

The report also shows that some of the least financially distressed households are in smaller Midwest cities such as Omaha, Neb., with the report’s best index of 80.5, and Oklahoma City, at 75.53.

The agency looks at household savings rates, consumer sentiment, employment, housing and credit ratings to compile the index.

The CredAbility report said there are some causes of concern nationally, including drops in household savings rates and declining consumer sentiment.

The national index, pegged at 70.73 for the first quarter of 2013, declined from 71.77 in the fourth quarter of 2012 but was better than the year-earlier index of 69.94.

Overall, said Phil Baldwin, CredAbility’s chief executive officer, the average American household has seen little improvement over the past year.

Baldwin said the January increase in Social Security taxes affected savings and consumer spending rates nationally. But one very good indication from the data was that more consumers were paying their credit card and consumer loans on time.

The CredAbility report came out a day after Gallup reported a finding from its annual survey on the economy and personal finance. The Gallup telephone survey, conducted in April, found that Americans appear to be a bit freer with their spending.

The percentage who said they were “spending less money” than they used to fell to 41 percent, down from a high of 57 percent in 2010. Consumer spending contributes to about 70 percent of the U.S. economy.

Among the 41 percent who said they are spending less than they used to, 31 percent said that is the “new normal” for them and 10 percent said it was a temporary lull.

To reach Diane Stafford, call 816-234-4359 or send email to stafford@kcstar.com.

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