Job loss and inability to pay medical bills are creating financial trouble for middle income Americans, according the Consumer Reports Index compiled by the Consumer Reports National Research Center.
The Index, which interviewed 1,015 adults between Sept. 27-30, combines responses from four sub-indices that track consumer sentiment, financial trouble, stress, retail spending, and employment.
The trouble tracker examines the proportion of financial difficulties and financial obstacles respondents have encountered. The September Index indicated that middle-and-upper-income Americans have taken a blow to their financial health in the last quarter of the year. Financial troubles increased 12.4% for Americans earning between $50,000-$99,000, and increased 2.4% for those who earn more than $100,000.
The Index attributed the financial trouble to 16.2% increase Americans who say they can’t afford to pay their medical bills or medication. Combined that with the fact that more middle class respondents are losing their jobs than gaining employment.
”These signs are troubling for the economy. While lower-income households have never really recovered from the recession, middle- and upper-income Americans have seen improvement and represent the bulk of discretional spending power, Ed Farrell, director of consumer insight at the Consumer Reports National Research Center, said in a news release. “Should this trend continue, retail numbers could suffer if those groups are less willing to engage in spending.”
Financial woes have made both middle and upper-income consumers more cautious about spending. The report shows a modest increase in spending following two consecutive months on the decline.
Though the index showed no change in the reported level of consumer stress, lower income respondents, those who live in the South, and those between 35-64 years old reported the most stress.