New data from LegalShield, the leading provider of membership-based legal services and identity theft protection plans, released a report highlighting consumer financial stress for August 2021 and shares what the data is forecasting for the coming months.
According to the LegalShield Economic Stress Index, August was an all-time low for consumer financial stress amid elevated household incomes and low rates of consumer debt delinquency as the economy rebounds.
“Our data indicates this summer was a strong time for consumers as we all began to spend a little more and feel more ‘normal’ as opposed to last summer. However, with federal assistance in many areas expiring, more financial pressure will be put back on households and businesses. Our data may begin to show us a different trend in the coming months,” said Jeff Bell, CEO of LegalShield.
LegalShield Consumer Stress Index
- Job growth sharply slowed in August as concerns and precautions around the Delta variant affected many industries including retail, hospitality, and food services.
- Despite slowing job growth, consumers continued to spend more on non-essential items as incomes grew. Pandemic-era federal protections and expanded benefits, like SNAP and the Child Tax Credit payments, were likely factors.
LegalShield Bankruptcy Index
- The Bankruptcy Index fell to its lowest level ever, decreasing (improving) 3.7 points to 19.1 in August.
- Total seasonally adjusted bankruptcy filings fell by 6.4% to 32,503 in July and were down 14% compared to a year ago. Reuters reported in early August that total non-business filings plunged 33% to about 444,000 for the year ending in June.
- Bankruptcies have remained low since federal protections, including income supplements, moratoria on evictions and foreclosures, and loan forbearance programs were introduced last year. Many consumers increased savings in the early months of the pandemic by reducing discretionary spending and paying down debt. However, throughout the spring and summer, consumers began to return to pre-pandemic economic activity and spending has risen.
- Bankruptcies are forecasted to remain low in the near term, although they may begin to rise later this year or in 2022 given the expiration of federal protections.
LegalShield Foreclosure Index
- The LegalShield Foreclosure Index remained mostly unchanged in July at a historically low level and improved slightly by 0.2 points to 32.6 in August. The expiration of the foreclosure moratorium may increase foreclosures in the coming months; however, the healthy housing market should prevent a surge.
- While the foreclosure moratorium and other government provisions kept foreclosures muted during the pandemic, the expiration of those programs may bring an increase in foreclosure activity this year. Black Knight reports that 1.45 million homeowners were 90 days or more past due on their payments in the beginning of August, which was more than a million above the pre-pandemic level.
LegalShield Housing Construction Index
- The Bankruptcy Index fell to its lowest level ever, decreasing (improving) 3.7 points to 19.1 in August.
- Total seasonally adjusted bankruptcy filings fell by 6.4% to 32,503 in July and were down 14% compared to a year ago. Reuters reported in early August that total non-business filings plunged 33% to about 444,000 for the year ending in June.
- Bankruptcies have remained low since federal protections, including income supplements, moratoria on evictions and foreclosures, and loan forbearance programs were introduced last year. Many consumers increased savings in the early months of the pandemic by reducing discretionary spending and paying down debt. However, throughout the spring and summer, consumers began to return to pre-pandemic economic activity and spending has risen.
- Bankruptcies are forecasted to remain low in the near term, although they may begin to rise later this year or in 2022 given the expiration of federal protections.
LegalShield Housing Sales Index
- The LegalShield Foreclosure Index remained mostly unchanged in July at a historically low level and improved slightly by 0.2 points to 32.6 in August. The expiration of the foreclosure moratorium may increase foreclosures in the coming months; however, the healthy housing market should prevent a surge.
- While the foreclosure moratorium and other government provisions kept foreclosures muted during the pandemic, the expiration of those programs may bring an increase in foreclosure activity this year. Black Knight reports that 1.45 million homeowners were 90 days or more past due on their payments in the beginning of August, which was more than a million above the pre-pandemic level.
About LegalShield
Pioneer. Disruptor. Trailblazer. LegalShield, a consumer brand under PPLSI, is leading the quest to provide equal access to legal advice, protection, and representation to every human, everywhere. Serving 4.5 million individuals and 140,000 businesses, we are the world's largest platform for legal, identity, and reputation management services across North America. Founded in 1972, we provide the tools and services needed to affordably live a just and secure life. We’re using technology and innovative products and partnerships to transform how and where people receive legal care by connecting members to our expansive network of trusted, qualified attorneys and law firms right at the palm of your hands. To learn more about LegalShield, PPLSI, and our online protection, privacy, and reputation management cybersecurity brand, IDShield, visit LegalShield.com, PPLSI.com and IDShield.com.
Media Contact:
Hollon Kohtz, Director of Publicity, LegalShield
[email protected]