While Consumer Confidence Drops, LegalShield’s Consumer Financial Stress Index Continues To Find Household Finances And The Economy Healthy
ADA, Okla., Jan. 10, 2018 /PRNewswire/ — The LegalShield Law Index, released today, has indicated for months that confidence levels measured by other means were likely inflated. The Conference Board’s Consumer Confidence Index fell sharply (worsened) by 6.5 points in December, the largest one-month decline in over two years, bringing it closer in line with the LegalShield Consumer Financial Stress Index. Meanwhile, the LegalShield measure edged down (i.e, consumer financial stress lessened) from 88.9 to 88.7 in December, due to mild improvements in its Estate Planning and Bankruptcy components, and remains near an all-time low after falling 0.1% in 2017. This underscores that consumers’ finances remain generally healthy as the new year begins, despite the drop in confidence.
The divergence over the last few months between Consumer Confidence and the LegalShield Consumer Financial Stress Index shrank markedly in December. The LegalShield data — along with other “hard” data sources, such as consumer spending — correctly indicated consumer confidence levels based on economic factors. Other measures of consumer confidence support LegalShield’s position, including the University of Michigan’s Index of Consumer Sentiment, which fell slightly in 2017.
“Although high consumer debt levels and a 10-year low in the personal savings rate are potential early indicators of future financial stress, LegalShield data continue to indicate that consumers are right to feel good about their current financial situations and the overall economy,” observed James Rosseau, LegalShield’s chief commercial officer. “Our data, which stem from concrete legal actions undertaken by consumers and small businesses, continue to be prescient when it comes to cutting through the noise and illuminating the state of the economy.”
Another component of the LegalShield Law Index — the LegalShield Housing Activity Index, a leading indicator of housing starts — suggests that housing construction will likely remain subdued over the near-term. The Housing Activity Index decreased (worsened) 2.2 points to 109.7 in December, as both the foreclosure and real estate components weakened. The index was essentially unchanged in 2017, but remains elevated by historical standards. Housing starts jumped to a seasonally adjusted annualized rate of 1.30 million in November, the highest level in over a year.
“The movement in housing is consistent with LegalShield’s predictions in July and August that housing starts could rebound to 1.3 – 1.4 million by the end of the year,” Rosseau added. “However, it will be interesting to see if the recently-signed tax legislation tamps down demand for new home construction due to several changes to the tax code that reduce the tax advantage of home ownership.”
Debuting in May, the LegalShield Law Index is made up of five indices: the LegalShield Consumer Financial Stress Index, LegalShield Housing Activity Index, LegalShield Bankruptcy Index, LegalShield Foreclosure Index, and LegalShield Real Estate Index. Each index depicts the health of the U.S. economy using LegalShield’s unique and proprietary database of member demand for and usage of legal services.
Additional predictive takeaways based on the data through December:
- The LegalShield Real Estate Index, a leading indicator of existing home sales, suggests that home sales are unlikely to maintain the robust growth experienced in November — though sales could pick up in 2018 if the growth in home prices slows.
- The LegalShield Bankruptcy Index, a leading indicator of monthly bankruptcy filings, continues to suggest that bankruptcies will remain subdued in the near term.
- The LegalShield Foreclosure Index, an advance measure of foreclosure activity, suggests that foreclosures should remain subdued in the short term.
The five LegalShield indices closely track a handful of key economic indicators, such as the Consumer Confidence Index (developed by the Conference Board), Housing Starts (reported by the U.S. Census Bureau), and Foreclosure Starts (reported by the Mortgage Bankers Association). Each LegalShield index has undergone a battery of statistical tests to validate its relationship to an existing economic indicator that sheds light on the health and direction of the U.S. economy. LegalShield publishes the Law Index monthly, on the sixth business day of each month. Please contact Jeff Monford at firstname.lastname@example.org for a copy of the economic assessment.
A pioneer in the democratization of affordable access to legal protection, LegalShield is one of North America’s leading providers of legal safeguards and protection against identity theft solutions for individuals, families and small businesses. The 45-year-old company has more than 1,743,000 members that are covered by its legal and identity theft plans. IDShield provides identity theft protection to one million individuals. LegalShield and IDShield serve more than 141,000 businesses. Both legal and identity theft plans start for less than $25 per month.
LegalShield’s legal plans provide access to attorneys with an average of 22 years of experience in areas such as 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 websites, LegalShield has dedicated law firms in 50 states and four provinces in Canada that members can call for help without having to worry about high 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 on call to restore a member’s identity.
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