Debt Relief Industry Recovery Postponed Again. Consumer Confidence, Sucks!

The latest consumer confidence numbers are out. It’s not good news.

Apparently consumers are less confident now about the future than they’ve been in a while. The Consumer Confidence index dropped almost seven points from last month.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence is now back to levels last seen during the 2008-2009 recession. Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased. Consumers’ assessment of present-day conditions did not fare any better. The Present Situation Index posted its sixth consecutive monthly decline, as pessimism about the current economic environment continues to grow.”

Without a growing confidence about the future, consumers will not engage in the consumption of credit again. Without that consumption of credit the demand for debt relief services will continue to be flat as the pipeline of problem debtors is further cleaned out over time.

It’s been a while since I took a look at the search trends to give us an indication of demand. You can look at this article from August to look at as a comparison.

Google Search Trends

Consumer Credit Counseling

Debt Settlement

Chapter 7 Bankruptcy

If there’s any good news it’s that it appears consumer demand has reached a plateau and any interest in the various options is milady fluctuating around these current levels since about March, 2011.


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See also  Potential Good News for Debt Relief Companies. Balances Increasing.

6 thoughts on “Debt Relief Industry Recovery Postponed Again. Consumer Confidence, Sucks!”

  1. The Commercial Collection Agency Association (CCAA) of the Commercial Law League of America reported Monday that members saw a year-over-year decline of 21% in the volume of accounts placed for collection, according to Annette Waggoner, executive director at CCAA.“The delinquency portion of business-to-business accounts receivable portfolios are in good shape but most businesses have not experienced any significant increase in sales because of the slow pace of economic activity,” says Waggoner.

    Commercial accounts placed for collection are a critical sign of the strength of business activity in the economy. Most CCAA members do not except any significant improvement in business activity for at least another year, according to the group’s survey.

  2. “Without a growing confidence about the future, consumers will not engage in the consumption of credit again.” – this is mere speculation as you have no credible proof to back this statement up.  You’re becoming, more and more, a speculator and not a journalist – dare I say the Bill O’Reilly of the debt relief gossip world.

    • Hey, it’s just my prediction on it.

      And I agree that retail sales and consumer confidence do not always align but I still believe a return to the levels of household and individual indebtedness are unlikely in the near future. I also think that as long as consumer confidence and forward optimism about jobs and the economy remain soft that it impacts the ability of people to engage in multi-year debt relief programs.

      The still uncertain issue is if an increase in consumer revolving debt due to new credit extensions is a sign of optimism and consumption or just using newly available credit to make ends meet which will result in new unmanageable debt.

      The latest G-19 numbers were not encouraging on consumers loading up on debt. See Credit Card Balances Continue to Drop in August.

      What data are you seeing that supports an alternative point of view?

    • Its not just consumers, its businesses too.
      Truck tonnage is down, container shipping is down (at a time when stores are stocking for holiday shopping), Walmart and Target are slimming what is stocked in existing stores and new store openings are being built out with significantly less sq footage.

      It is not hard to make speculations about decreased demand of all types. In fact, it is increasingly difficult to speculate in a pom-pom capacity that there are, or will be improvements.


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