American consumers can look forward to strong financial health due to a combination of rising incomes, manageable debt levels, and an increasingly tight labor market, according to a new report from LegalShield.
LegalShield’s Law Index is a suite of leading indicators of the economic and financial status. One component of this is the LegalShield Consumer Financial Stress Index.
It remains historically healthy, while the Bankruptcy Index improved 3.9 points to 46.0 in the third quarter, reflecting the solid financial health experienced by most consumers.
“Without question, consumers are feeling good about the economy and their finances right now,” explained Dave Coffey, LegalShield’s Senior Vice President and Chief Digital Officer. “For the last two years, the LegalShield Law Index has pointed toward this robust economy, and we continue to have a bullish outlook for consumers. Low consumer financial stress should translate into solid retail spending, and we suspect that will drive hiring rates and wages higher to keep up with demand.”
LegalShield is less optimistic about the housing market.
The LegalShield Real Estate Index suggests existing home sales are unlikely to improve in the short term due to severe inventory shortages and rising prices, while the LegalShield Housing Activity Index suggests that housing construction momentum has stalled in 2018.
Residential construction continues to face numerous headwinds, including labor supply shortages; rising labor costs; and (most notably) rising prices for lumber, steel, and aluminum, where tariffs continue to put upward pressure on prices.
“Although the housing market varies from region to region, overall we’re not seeing a big rebound occurring any time soon,” said Coffey. “The Federal Reserve is on track to raise rates for the fourth time this year in December, which will put even more upward pressure on mortgage rates and make home buying even less affordable. Normally we’d expect to see home builders respond by ramping up construction, but it just hasn’t materialized.”
The LegalShield Law Index reflects the demand for legal services among the company’s provider law firms in all 50 states. LegalShield provides legal safeguards and identity theft protection.