Ohio State survey: Improving economy lessens debt stress for Americans

– In another encouraging economic sign, a national survey showed that American consumers felt less stress in March than they did in February about the amount of debt they owed.

The Consumer Debt Stress Index fell about 4 percent in March, to 119.6 from the February figure of 124.
“Americans continue to feel more confident that the economic recovery will proceed and that they will be able to manage their debts in the future,” said Lucia Dunn, professor of economics at Ohio State University and one of the leaders of the DSI.

The DSI is conducted by Ohio State’s Center for Human Resource Research and is based on telephone interviews of randomly selected Americans. Each month’s index score is based on the past three months of interviews, with the average sample size being 673. The DSI probes consumers about all types of debt, including mortgages, credit cards, home equity loans, car loans and student loans.

The DSI has been conducted monthly since January 2006, where its base value was set at 100.
March’s decline continues a trend of dropping debt stress which began in July 2009, when the index hit its peak value of 155.3, Dunn said.

The July figure meant that consumers last summer were experiencing stress levels from their debts that were more than 50 percent higher than when the index began in January 2006.

While the index had been generally dropping since then, February 2009 had seen a slight upward blip in debt stress as the recovery in the job market appeared to falter, Dunn said.

But there was a rebound in the job numbers in March, which apparently calmed consumers.

Not everyone is feeling equally as comfortable about their debt as the economy recovers – especially women.

The March report showed debt stress dropped by 5.7 points for men, while only dropping 2.7 points for women. This leaves the stress levels for women 30 points higher than for men.

“Women have a higher ratio of debt to income than do men, which explains some of the difference,” Dunn said. “But even for the same level of debt-to-income, women experience about a third higher level of debt stress than do men.”