Consumer financial distress is rising as the Christmas shopping season approaches thanks to increasing gas and food prices and sinking housing and employment markets, Atlanta-based CredAbility says.
Georgia is the fourth-most-distressed state in the national nonprofit credit counseling agency's quarterly report that measures employment, housing, credit, household budgets and net worth. The only category in which consumers reported improvement is credit, which shows people are managing it better, said Mark Cole, the chief operating officer of Credability and author of the Consumer Distress Index report. But overall the downward trend was troubling, he said.
"What I can say is that until the jobs picture gets better, I don't think the housing picture is going to get better," Cole said.
On CredAbility's 100-point scale, Georgia scored 62.54. The U.S. average was 66.7. Any score below 70 indicates consumer distress. Georgia has been below 70 since the first quarter of 2008.
The majority of people coming to CredAbility for consumer credit counseling have lost jobs or may have found new jobs that pay less, Cole said. That creates stress on their housing costs, which are fixed.
"It's really hard to recalibrate your housing expenses like you can do with your cell phone or cable bill," he said.
He pointed out that the U.S. Department of Agriculture predicts that the cost of a Thanksgiving meal will be up 13 percent this year. Mortgage delinquency rates are rising again after dropping during the summer, and consumer confidence is down.
"Consumers have worked really hard to make tough decisions to live within their means, but this whole kind of stagnant wages and rising cost of gas and food have had a real impact on them," he said.
"Unless consumers are willing to borrow, they will need to scale back their holiday spending," Cole said.
Most stressed states
1. Nevada
2. Mississippi
3. Michigan
4. Georgia
5. Alabama
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