Consumer Financial Stress at Lowest Level in More Than a Year

Consumer Confidence to Remain Elevated and Risk of Recession Low for the Remainder of 2019 According to LegalShield Law Index  

  • Financial Stress continues to improve, likely to maintain low levels through year-end – Consumer Financial Stress Index 
  • Housing Activity Index Hits its Highest Point Since 2005 with Potential Homebuilding Improvements Signaled for 4th Quarter - LegalShield Housing Activity Index 
  • Home Purchasing Activity Unlikely to Maintain 2019 Growth Trajectory - LegalShield Real Estate Index 
  • Bankruptcy and Foreclosure Activity to Remain Muted for 4th Quarter 

October 15, 2019 09:17 AM Eastern Daylight Time 

ADA, Okla.--(BUSINESS WIRE)--Released today, the 3rd Quarter 2019 LegalShield Law Index, a suite of leading indicators of the economic and financial status of U.S. households and small businesses, indicates that consumer confidence will remain elevated and risk for recession is low for the remainder of 2019. 

“Across all legal services measured, consumer stress is declining, and housing activity is increasing.”

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“Despite some indications of a slowing economy, the LegalShield Law Index suggests U.S. consumers remain on sound footing,” said Scott Grissom, Senior Vice President and Chief Product Officer, LegalShield. “Across all legal services measured, consumer stress is declining, and housing activity is increasing.” 

“Overall, LegalShield data suggests the potential for further near-term improvements in housing activity, but a sustained resurgence appears less likely given current economic headwinds facing the industry,” added Grissom. 

For the full LegalShield Law Index quarterly findings visit https://www.legalshield.com/law-index

Consumer Financial Stress Lowest Level in More Than a Year 

The LegalShield Consumer Financial Stress Index (CFSI) improved by 3.3 points in Q3 to 74.0, its strongest reading in more than a year. However, several economic headwinds could negatively affect consumers in the coming months, including a job growth slowdown; wage growth declines as the rate recently fell below 3% for the first time in more than a year; trade tensions; and deteriorating global economic conditions affecting business confidence. For now, however, consumer financial stress remains low, meaning that consumers are well-positioned for the rest of the year. 

Meanwhile, the Conference Board’s Consumer Confidence Index fell nine points in September but is above its reading from a quarter ago. According to the NY Fed, the share of delinquent outstanding consumer debt is at its lowest level since 2006. One factor to watch is the stock market, which is highly correlated with consumer confidence: if a significant market correction occurs, consumer confidence may well follow suit. 

LegalShield Housing Activity Index Suggests Potential Homebuilding Improvements Next Quarter 

The LegalShield Housing Activity Index, a leading indicator of housing starts, increased from 113.6 in Q2 to 119.3 in Q3, its highest point since 2005. Housing starts surged 13% to an annualized rate of 1.36 million in August, reaching the highest level of the current business cycle. However, some headwinds persist: residential investment contracted for the sixth consecutive quarter in Q2, and affordability is still a concern. Scarce building lots, trade tensions and a tight labor market have elevated the cost of materials and labor for homebuilders – all have contributed to a shortage of affordable homes. 

Meanwhile, The NAHB Housing Market Index, a reliable measure of homebuilder optimism, reached a 13-month high in September as 30-year mortgage rates remain below 4%. Additionally, housing permits increased more than 12% in August, the strongest growth since early 2017 and a promising sign for additional housing start growth. 

LegalShield Real Estate Index Signals Existing Home Sales May Plateau in 4th Quarter 

Furthermore, the LegalShield Real Estate Index, a leading indicator of existing home sales, signals purchasing activity is unlikely to maintain its 2019 growth trajectory and may plateau in the fourth quarter. The index eased 0.7 points to 102.9 in Q3 after rising sharply last quarter. Meanwhile, existing home sales improved in August to a 5.49 million annualized rate, the best reading since March 2018, nearly 2.6% above year-ago levels. 

LegalShield Bankruptcy Index Indicates Bankruptcy Activity to Remain Muted for 4th Quarter 

The LegalShield Bankruptcy Index, a forward-looking indicator of bankruptcy filings, indicates bankruptcy activity should remain muted for the next 1-3 months. The index improved by 1.6 points to 47.8 in Q3, the lowest level in since late 2018. Likewise, bankruptcies fell 2.5% in Q3 and are down 4.5% compared to year-ago levels. 

LegalShield Foreclosure Index Indicates Continued Subdued Foreclosure Activity for 4th Quarter 

The LegalShield Foreclosure Index indicates continued subdued foreclosure activity over the coming quarter. The index improved 11.2 points to 49.3 in Q3 and is down nearly 14 points compared to a year ago. Despite headwinds depressing the supply of affordable housing, there is little evidence that suggests foreclosure starts will rise in 2019. 

The quarterly LegalShield Law Index reflects the demand for legal services among the company’s provider law firms in all 50 states. The Law Index is a suite of leading indicators of the economic and financial status of U.S. households and small businesses, including the LegalShield Foreclosure Index in addition to the Consumer Financial Stress Index, Housing Activity Index, Real Estate Index, and the Bankruptcy Index. 

About LegalShield 

A trailblazer in the democratization of affordable access to legal protection, LegalShield is one of North America’s largest providers of online legal subscription plans covering more than 4.375 million people. Its IDShield identity theft solution for individuals and families has more than one million members. LegalShield and IDShield serve more than 141,000 businesses. In addition, 34,000 companies offer LegalShield and IDShield plans to their employees as a voluntary benefit. Both legal and identity theft plans start for less than $25 per month. 

LegalShield’s legal plans provide access to qualified law firms and their attorneys with an average of 22 years of experience in family matters, estate planning, financial and business issues, consumer protection, tax, real estate, benefits disputes and auto/driving issues. Unlike other legal plans or do-it-yourself online services, LegalShield has dedicated law firms in 50 states and all provinces and territories in Canada that members can access at a fraction of typical law firm hourly rates. 

IDShield provides identity monitoring and restoration services and is the only identity theft protection company armed with a team of Licensed Private Investigators to restore a member’s identity. 

For more information visit https://www.legalshield.com/law-index

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Contacts

Media:
Elyse Gentile
ICR
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646-677-1823