Skip to main content

As Pandemic Relief Programs Expire, Initial Consumer Concern on the Horizon

ADA, Okla. - October 18th, 2021

Data from LegalShield’s Economic Stress Index reveal healthy third quarter, though concerns about employment issues mounting

 Despite the economic challenges faced by consumers, LegalShield data show that overall consumer stress remains muted as we enter the final quarter of the year. Thus far, the Economic Stress Index has not increased despite the Delta variant’s impact on employment, the expiration of federal unemployment insurance programs, and rising rent and housing costs. However, demand for legal services related to employment and landlord-tenant issues rose in the third quarter, suggesting that some consumers are facing uncertainty about what the expiration of pandemic-era support measures will mean for their financial situations. If this trend continues, it could translate into a broader increase in financial stress and slower spending.

“While our data indicated this summer was a strong time for consumers, we feel that there may be some turbulent times ahead, with federal assistance in many areas expiring and added financial pressures on households and businesses around the country,” said Jeff Bell, CEO of LegalShield.

LegalShield’s data tend to be leading indicators of consumer stress and have a significant timing advantage over conventional measures of stress, so while most indices remain in healthy territory, it is very important to monitor developments through the rest of the year, as many economists and policymakers expect consumer stress to increase.

Key Takeaways and Trend Predictions

 LegalShield Consumer Stress Index

  • The Consumer Stress Index increased (worsened) 0.5 point in September, after 3 consecutive months of progress.
  • The U.S. Census Bureau estimates that the poverty rate fell last year in part to record increased savings and government aid. While consumers have built a cushion, it is now slowly starting to deplete as the world starts to reopen and government programs dry-up.
  • Concerns of rising inflation are also weighing on households, and the New York Federal Reserve reports that inflation expectations hit a new peak of 5.3% in September, approximately double that seen at the beginning of the pandemic.

LegalShield Bankruptcy Index

  • The Bankruptcy Index remained virtually unchanged in September and is holding around an all-time low.
  • Bankruptcy filings were down over 20% year-over-year, largely due to government protections, payment moratoria, and expanded unemployment benefits, all of which have expired or will expire soon.
  • Financial pressures are beginning to mount, particularly for lower-income consumers that have less savings, with the cost of goods increasing and housing costs skyrocketing.  According to a Zillow report, rents rose by 12% year over year in August.

LegalShield Foreclosure Index

  • The Foreclosure Index also remained virtually unchanged in September near historically low levels.
  • While foreclosure activity has increased since the expiration of the foreclosure moratorium, it is still trending well below pre-pandemic levels and is not expected to reach the levels seen after the Great Recession.
  • There is consensus among most economists that the expiration of mortgage-related support from the government is unlikely to trigger an unprecedented wave of foreclosures, in part due to the surge of home values during the pandemic, putting many borrowers in a good position to sell their homes to avoid foreclosure.
  • Generally, foreclosure activity is expected to increase in the coming months.

LegalShield Housing Construction Index

  • The Housing Construction Index increased and reached a new record high last month. Incredibly strong demand has increased construction, but homebuilders continue to grapple with high material costs and a lack of skilled labor.
  • Housing starts are up 17% year over year and rose 5% in September from the month prior.
  • The increased demand for single-family homes in suburban areas brought on by the pandemic has not eased, but homebuilders are struggling to keep, as shown by the staggering increase in permitted homes not yet started.
  • The Bureau of Labor Statistics reports that inputs for residential construction increased a whopping 19% in 2021.

LegalShield Housing Sales Index

  • The Housing Sales Index also increased and reached a new record high last month. While home sales are expected to grow, increasing prices may have an effect on affordability for some consumers.
  • After recovering from severe inventory shortages earlier in the year, the supply of housing seems to be improving, though record high prices are continuing to deter some prospective buyers from moving forward.
  • According to data from Collateral Analytics, the average monthly payment to buy an average home with a 30-year fixed mortgage is up by nearly 20% in 2021, reaching the highest level since 2007.
  • Despite the concerns of affordability, all indications point to housing sales likely remaining strong for the foreseeable future.

The LegalShield Economic Stress Index is comprised of data that shed light on the economic and financial status of U.S. households and small businesses and provides actionable intelligence on the direction of the U.S. economy in the near term. The five sub-indices highlighted include the Consumer Stress Index, Bankruptcy Index, Foreclosure Index, Housing Construction Index and Housing Sales Index, and are constructed from LegalShield’s proprietary data. The sub-indices reflect the demand for various legal services over the past 15 years and are based on data collected through LegalShield’s provider law firms in all 50 states.


About LegalShield
Pioneer. Disruptor. Trailblazer. LegalShield, a consumer brand under PPLSI, is leading the quest to provide equal access to legal advice, protection, and representation to every human, everywhere. Serving 4.5 million individuals and 140,000 businesses, we are the world’s largest platform for legal, identity, and reputation management services across North America. Founded in 1972, we provide the tools and services needed to affordably live a just and secure life. We’re using technology and innovative products and partnerships to transform how and where people receive legal care by connecting members to our expansive network of trusted, qualified attorneys and law firms right at the palm of your hands. To learn more about LegalShield, PPLSI, and our online protection, privacy, and reputation management cybersecurity brand, IDShield, visit and