- Widening consumer stress gap hints at incumbent advantage for
second straight month - LegalShield’s Consumer Stress Legal Index
rose in April, along with Consumer Finance, Bankruptcy and
Foreclosure sub-indices - Consumer billing disputes second highest
all-time
New data from LegalShield focusing on legal services inquiries
from consumers in key battleground states could bode well for the
incumbent president's re-election bid this November.
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LegalShield's Consumer Stress Index
Points to 2024 Trend: Higher Battleground Stress Has Preceded
Republican Wins, Lower Stress Favored Democrats in Last Five
Elections (Graphic: Business Wire)
For the second straight month, a gap favoring a President Biden
hold on the White House has held between consumer stress felt in
battleground states (as shown by requests for legal assistance) as
compared to the average consumer stress level felt across the
nation.
LegalShield's Consumer Stress Legal Index (CSLI) shows a growing
divergence between consumer stress measured in battleground states
(purple) compared to the country as a whole – a pattern that has
historically preceded a Democrat elected to office in 2008, 2012,
and 2020.
When battleground states exhibited higher stress compared to the
national average, a Republican was elected in 2004 and 2016. The
legal inquiries that fuel the CSLI offer a unique lens into the
mindset of everyday Americans as they navigate personal and
financial challenges.
“Two key things happened in April: the national consumer stress
level went up and the margin between the battleground states’
stress level and the national index grew further apart,” said Matt
Layton, LegalShield senior vice president of consumer analytics.
“It’s too early to tell how consumer stress will rise or fall in
the coming months, but April’s numbers are suggestive of a trend to
the incumbent party’s path to victory.”
LegalShield’s CSLI is based on a dataset of more than 35 million
consumer requests for legal assistance since 2002. On average,
LegalShield receives approximately 150,000 contacts each month from
consumers seeking legal help in more than 90 areas of law,
including key consumer issues.
The national CSLI rose 2.4 points to 63.8 in April.
Red, Blue, Purple Legal Requests
This election cycle, LegalShield is reviewing consumer stress
levels on a politically geographic basis, separating red, blue, and
purple battleground states. LegalShield classified states based on
the outcome of the 2020 election. Battleground states for 2024 are
Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania
and Wisconsin.
Consumer stress in the battleground states rose slightly in
April, up 0.7 points over March, to 60.7.
The margin between purple states and the national index more
than doubled in April to 3.1 points, up from a margin of 1.4 points
in March.
“Our data tracks actions taken by consumers to seek legal
advice,” said Warren Schlichting, LegalShield CEO. “Those
inquiries, in aggregate, are more revealing to Americans’
collective state of mind than polls or surveys. This data follows a
trend in the last five presidential elections over the past 20
years and we continue to watch these trends in 2024.”
April’s numbers continue to show a split in stress among blue
states at the high end and red states lower, though the gap
narrowed slightly. Blue states saw stress decline 1.9 points to
64.9. Red states’ stress increased a half point to 57.0.
National Consumer Stress on the Rise
LegalShield’s benchmark CSLI rose 2.4 points over March to 63.8,
up 2.8 points, or 4.5% from April a year ago. The nationally
recognized index serves as a barometer for the legal and financial
anxieties facing everyday Americans.
Since its inception, the CSLI has been a 60–90-day leading
indicator of the closely watched Consumer Confidence Index (CCI)
with an inverse correlation level of -0.85. As consumer stress
rises, confidence tends to drop two to three months later. The CCI
reported a 7.7-point drop to 97.0 in April, down 13.9 points, or
12.5% since the start of the year.
The rise in LegalShield’s CSLI coincides with a jobs report that
fell short of expectations, with 175,000 jobs added. Unemployment
also ticked up to 3.9%, slightly higher than the steady 3.8% most
economists expected. The Consumer Price Index reported an increase
of 0.3% in April, slightly below estimates. Annual inflation is
still at 3.4%, in line with most economists’ expectation. That rate
is still above the Federal Reserve target of approximately 2.0% to
consider lowering interest rates.
“The macro data is a bit mixed, with inflation being a key
metric for consumers,” said Layton. “With rising prices and
interest rates remaining at the current level, pressure on
consumers continues.”
Consumer Finance, Bankruptcy and Foreclosure Indices
Rise
All three sub-indices that make up the CSLI - the Consumer
Finance, Bankruptcy, and Foreclosure Indices - ticked up, bucking
movement in the opposite direction in March.
The Consumer Finance Index, which tracks approximately 60 areas
of law related to personal finances, saw the greatest increase of
the three sub-indices, moving to 103.2 in April, up from 99.7 in
March, which was its lowest level since the start of the pandemic
in 2020.
As Consumer Finance issues escalate, calls to LegalShield
provider law firms about billing disputes continue to rise. April
was the second-highest month on record and the high-water mark
since March 2021.
The Bankruptcy Index rose to 31.1 in April, up 1.1 points month
over month and 35% year over year. LegalShield’s Bankruptcy Index
historically leads actual bankruptcy filings as reported by the
U.S. court system by two quarters, with a .98 correlation.
“The Bankruptcy Index is on a steady rise since Q4 of 2021 after
a sharp drop-off as pandemic relief funds hit in 2020,” said
Layton. “Bankruptcy appears to be creeping back to pre-pandemic
levels and given our index’s leading nature of actual filings, we
are watching closely to see where the next plateau may be.”
The Foreclosure Index rose 2.2 points to 38.4, down 4% year over
year and below the two-year average of 39.3.
About the LegalShield Consumer Stress Legal Index:
As part of LegalShield’s mission to ensure every person has
equal access to justice, we mine our data for insights policymakers
can use to make a real, positive impact in their decision making.
Released monthly, the LegalShield Consumer Stress Legal Index is
comprised of three sub-indices which reflect the demand for various
legal services. LegalShield’s dataset includes more than 35 million
consumer requests for legal assistance since 2002, averaging
approximately 150,000 calls received monthly. The CSLI uncovers the
daily challenges people are facing and provides actionable
intelligence to help policymakers and industry leaders bridge those
gaps.
About LegalShield:
For more than 50 years, LegalShield has provided everyday
Americans with easy and affordable access to legal advice, counsel,
protection, and representation. Serving millions, LegalShield is
one of the world's largest platforms for legal, identity, and
reputation management services protecting individuals and
businesses across North America. Founded in 1972, LegalShield, and
its privacy management product, IDShield, has provided individuals,
families, businesses, and employers with tools and services needed
to affordably live a just and secure life. Through technology and
innovation, LegalShield is disrupting the traditional legal system
and transforming how and where people receive legal guidance and
services, with access to thousands of qualified, trusted attorneys
and law firms. LegalShield and IDShield are products of Pre-Paid
Legal Services, Inc. To learn more about LegalShield and IDShield,
visit LegalShield.com and IDShield.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240523800066/en/
Hollon Kohtz, Director of Communications
hollonkohtz@pplsi.com