Released , the April 2020 LegalShield Law Index, a suite of leading indicators of the economic and financial status of U.S. households and small businesses, saw a sharp month-over-month decline in its Consumer Financial Stress Index, suggesting that federal, state and local policymaking actions have been successful at temporarily relieving consumer financial concerns as the coronavirus pandemic took hold throughout America. Notwithstanding, LegalShield data also make clear that consumers are facing increasing financial pressure, as the demand for “consumer finance” legal services such as vehicle financing and billing disputes remains at an all-time high after spiking in March. LegalShield has been measuring the demand for various legal services for nearly 16 years.
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We have to admit to some initial surprise at the data because it is counterintuitive to what we see and know is happening during this horrible crisis.
“We have to admit to some initial surprise at the data because it is counterintuitive to what we see and know is happening during this horrible crisis,” said Scott Grissom, Senior Vice President and Chief Product Officer, LegalShield. “However, as we dug in further, it became clear that in the midst of potentially great financial challenges, consumers and small business did find some temporary relief, such as the federal Paycheck Protection Program for small business employees, economic stimulus payments of $1200 to eligible adults, enhanced unemployment benefits, certain states instituting moratoria on evictions due to unpaid rent or mortgages, and even temporary mortgage relief by certain financial institutions. Even so, we believe that this array of initiatives created to ‘bridge us to recovery’ in the near-term may not have staying power in ultimately warding off consumer financial pain long-term. In fact, we believe the opposite.”
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In explaining this month’s results, Mr. Grissom said the LegalShield Consumer Financial Stress Index fell (improved) 10.0 points, from 80.6 in March to 70.6 in April. He noted that the March results had marked the highest (worst) reading in nearly four years and the largest-ever increase in the 16-year history of the series, which made the 10.0 point reversal in April almost as significant.
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