Bankruptcy, unemployment, and foreclosure rates have always said a lot about the condition of the economy at a given time. It doesn't take a statistician to figure out that these rates bear some relationship to one another, especially in the current climate. If you lose your job, you're going to have trouble floating your bills, especially steep ones like mortgage payments. Even if you don't lose your job, you might still be facing foreclosure or need bankruptcy protection. If you're one of the millions of Americans who got talked into one of those adjustable rate mortgages during the housing boom, your interest is unpredictable, stretching your budget to the extreme. And, as lenders continue to keep a choke hold on available credit, it is becoming increasingly more difficult to find ways to make ends meet when facing financial crises.
Well, now there's some real math behind the relationship among these economic indicators. The Associated Press recently teamed up with Tony Smith, an expert statistician at the University of Pennsylvania, and unveiled the "Economic Stress Index- (ESI). Based upon Smith's formula, the ESI measures the condition of the economy through a comparison of the bankruptcy, unemployment, and foreclosure rates in each county across the country. The data begin with the rates in October 2007, and the AP plans to continue tracking the rates each month as the recession wears on.
The ESI formula translates into a numerical figure of 1 to 100 for each county; the higher the number, the higher the chance that a given person within the county is unemployed, facing foreclosure, or in need of bankruptcy protection. So, for example, an ESI of 20 means there's a 20 percent chance that a random worker within the county is facing one of these problems.
The overall findings of the ESI to date come as no surprise, as they reflect the sharp downturn we've all seen going on around us in recent months. The decline began in isolated areas but quickly spread, gripping most of the major regions throughout the country. In September of last year, over 3,000 counties around the country had an index score of 10 or higher. By February of this year, just five months later, that figure soared to an index of 40.
But, the county-by-county findings are the most illuminating aspect of the ESI. They put a face on this recession, showing where the downturn has hit the hardest and which areas have managed to remain relatively stable. The worst hit areas include those counties along the coasts, particularly in the Southeast and Southwest regions. For instance, in counties with more than 25,000 residents, Imperial County, California has highest overall index number. Fifteen of the twenty hardest-hit counties are concentrated in just six states: North Carolina, South Carolina, Tennessee, Ohio, Michigan, and Indiana. Within this group, Burlington, North Carolina and Myrtle Beach, South Carolina are struggling with particularly severe unemployment rates. Areas that have remained relatively stable so far include the Great Plains region and counties with a large number of government jobs.
The AP has plotted the ESI statistics onto an interactive map. To check them out, go to the website below:
Remember, if you're one of the millions of Americans caught up in the current turmoil and struggling to manage your debts, call a bankruptcy attorney today and learn how bankruptcy can help you get back on your feet. In North Carolina, contact The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson.