CredAbility mixes data on housing, consumer credit, household budgets, employment and net worth to score the average consumer's financial well-being. An index below 70 signals that consumers overall are in distress. Yesterday's score, at just a half-point over the distress mark, shows that Americans still have a long way to go before they are comfortable.
In addition, that third quarter score is down slightly from the previous quarter's 71.3. "In the third quarter we took a step back," said Mark Cole, executive vice president at CredAbility. "Employment went down a little, and the housing numbers dropped quite a bit," Cole said, thanks mostly to a rise in delinquency on mortgage payments and rents. (Read more: 401(k)s Come Roaring Back)
The step-forward, step-back movement of the index, Cole says, shows "the grinding process of getting out of our economic situation."
It may be, however, that individuals have done all the grinding they can.
Since the financial crisis hit, Americans have reduced their consumer debt, spend less on eating out, and stint on gas and groceries. The household budget component has been one of the strongest numbers in CredAbility's index since the middle of last year. "They've changed those habits they had control over," says Cole of consumers. "It's really a heartening reaction to a really difficult situation."
Having put their own houses in order, Americans are still feeling the drag of those macroeconomic forces that are out of their control. "Employment and housing have been the big drivers," says Cole, in how families are faring. (Read more: 'Rare Good News' on Retirement Savings)
The effect of housing and unemployment can be seen in the regional variations in the distress index. In Florida cities like Tampa and Orlando, where the housing market is still mired in foreclosures and low prices, the distress index has yet to break 60. (See chart.) In Washington, D.C., where real estate stayed relatively healthy through the crash, consumers have long been out of distress.