Gotham’s consumers are managing their credit better than the rest of the contry, according to a new study released last week.
However, thanks to their lower cost of living, upstate residents are generally doing better in weathering consumer budget problems, but worse times could be near, according to officials of the CredAbility Consumer Distress Index.
The quarterly index measures the financial health of American households by regions. It uses employment, housing, credit, household-budget and net-worth measurements.
In the third quarter, the New York City region scored 70.80 percent, which gives it the ninth-best score out of the 30 biggest metro areas in the nation, according to the index.
New York state’s number was 73.61 percent.
A score of less than 70 percent indicates a region is financially distressed. The national number was 70.5 percent.
Why has the city had better consumer numbers than most of the other big cities?
“People have done really well with household budgets and credit. Those have been strong points in New York City,” according to Mark Cole, executive vice president of CredAbility.
Job creation, he added, grew quite a bit faster in New York City than in the rest of the country in the third quarter.
The bad news, adds Cole, is that three regions upstate are in financial distress: Rochester, which came in at 68.9 percent, Buffalo-Niagara Falls at 66.5 percent and the Albany area at 68.1 percent.
These areas have been hard-hit with plant closures and have been financially distressed over the last year.
All of these regions had unemployment rates rise in the second quarter and had some housing problems.
“These three regions all had really high rental-delinquency rates. They are some 50 percent higher than national rates,” Cole said.
Bad news may be coming for New York City in the next quarter, according to the report.
Cole says that owing to the problems caused by Hurricane Sandy, and given that the city’s number is only just above the distressed level of 70 percent, “it is very possible” New York City will become a financially distressed area in the fourth quarter.
Nevertheless, Cole, in pointing to the 70.5 national number, believes that, in most parts of the country, people are acting responsibly in how they spend. They are, he adds, doing better at that than their elected leaders.
“While our national leaders are negotiating to improve our country’s financial condition, most households have already made the tough spending choices in recent quarters to avoid their own fiscal cliff,” Cole added.
“For the first time in four years, the average US household is able to spend during the holiday season without taking on new debt or creating a major financial problem,” he said.
But he also warns that consumers must continue to be diligent on spending. He expects little in the way of wage growth for the next few years.