In the past 30 days 13% of households with incomes less than $50,000 have experienced a layoff.

Households with annual income lower than $50,000 were disproportionately affected by poor economic conditions in July according to a study conducted by the Consumer Reports National Research Center that tracks personal financial experiences, attitudes and activities.

According to the report, In the past 30 days 25% of households with incomes less than $50,000 have been unable to afford medical bills or medications, 13% lost their job or were laid off, 13% lost or have reduced healthcare coverage, and 20% missed a payment on a major bill (not mortgage).

The Consumer Reports Index is comprised of five key indices: the Sentiment Index, the Trouble Tracker Index, Stress Index, the Retail Index, and the Employment Index. The Consumer Reports Index measures a variety of key consumer experience indicators including employment status, missed payments, inability to pay medical bills or afford medication, retail purchase activity and intent, home-buying, car-buying and other forces that affect consumers' personal financial vitality.

"The Consumer Reports Index is about people. Our goal is to quantify what consumers are personally experiencing from the forces of the economy and how it affects their buying decision," said Ed Farrell, Director of Market Research for Consumer Reports National Research Center.

The Index is based on a nationally representative random probability sample of U.S. telephone households. The August '09 index is based on a total of 1,009 interviews, was completed between July 30 and August 2, 2009 (each Index is based on 1,000 to 1,010 interviews). The Consumer Reports Index has been tracking since April '09 and the report includes five months of data. Here are the key findings:

Consumer Reports Consumer Sentiment Index: 41.1

The Sentiment Index captures respondents' attitudes regarding their financial situation versus the previous year. It asks them if they are feeling better off or worse off than a year ago. When the index is more than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. The Sentiment Index can vary from a high of 100 to a low of 0.

This month consumers are feeling less well off then they were several months ago. Since its low point, which Consumer Reports observed on October 20, 2008 (37.8), overall consumer sentiment had increased consistently to 48.5 in June 09. However, in July consumer sentiment declined to 43.2, and to 41.1 in August '09 erasing earlier gains.

Consumer Reports Trouble Tracker Index: 61.7

The Trouble Tracker focuses on both the proportion of consumers that have faced difficulties as well as the number of negative events they have encountered. The negative events include: the inability to pay medical bills or afford medication, missed mortgage payments, home foreclosure, interest rate increase, penalties fees, reduced lines of credit or other changes in credit card terms, job loss or layoffs, reduced healthcare coverage, or the denial of personal loans. The Consumer Reports Trouble Tracker Index is then calculated as the proportion of consumers that have experienced at least one of the negative events comprising the index multiplied by the average number of events encountered.

- The Trouble Tracker reached its highest reading in this month (61.7) up from it low point in May '09 (48.5) and 2.9 points above the July report. The rise in the Trouble Tracker was driven by increases in:

- Credit Card - increased rate, penalty fees
- Missed payment of a major bill - not mortgage
- Lost job or were laid off
- The most prevalent difficulty faced by consumers in the past 30 days was the inability to afford medical bills or medications (14.3%).

Consumer Reports Stress Index: 63.5

The Stress Index captures attitudes regarding the amount of stress consumers feel compared to a year ago. It asks whether they are feeling more stressed or less stressed. When the Stress Index is more than 50 consumers are feeling more stress and when it is below 50 they are feeling less stress compared to a year ago. The index can vary from 100 (Total Stress) to a low of 0 (No Stress).

Overall, the level of stress consumers feel is up from a year ago. However, since April '09 (63.8) the amount of stress consumers were reporting had steadily declined through June '09 (57.0). In July this index kicked up slightly to 58.4 and continued to increase to 63.5 in August, effectively reversing all gains made to date.

Consumer Reports Retail Index: Past 30-Day 9.5, Next 30-Day 7.5

The Retail Index looks at consumer purchases in the past 30 days as well as the outlook for planned purchases in the next 30 days across several categories. The Consumer Reports Retail Index represents the proportion of respondents that made a purchase in the following categories: major home appliances, small home appliances, major home electronics, personal electronics, and major yard & garden equipment. The Retail Index is a weighted calculation. For example, a major appliance is of greater value than a small appliance. Because of their size and frequency car and home purchases are tracked separately.

The decline in consumer sentiment, the increase in the problems faced, and the escalation of stress has taken its toll on the Retail Index for the past 30 days. In August '09 (reflects July '09 activity), the Retail Index declined to 9.5 from 13.0 in July '09.

Looking at individual category purchases from the past 30 days, purchasing was down in August '09 versus July '09 across all categories. The greatest declines:

- Major appliances (5.8% versus 8.8%, respectively)
- Small appliances (14.1% versus 21.9%, respectively)

The category that maintained activity best was personal electronics (22.2%) from the previous month (27.1%).

Consumer Reports Retail Outlook for August '09 (reflecting planned activity 7.5%) was down only slightly versus July '09 (8.6%). The greatest contributors to the Retail Index, major appliances and major home electronics, were virtually unchanged in August '09 versus July '09. However, personal electronics purchases declined from 22.1 percent to 15.7 percent.

Purchases of new cars were down to 2 percent in August '09 (July '09 activity) from 4 percent in July (June '09 activity), reversing a trend of slight month-over-month growth which began in May '09. In August '09, the outlook for planned new-car purchases (1.8%) was down substantially versus July '09 (4.1%).

Consumer Reports Employment Index: 48.0

The Employment Index examines the change in employment of those that reported starting a new job versus those that have lost their job or were laid off in the past 30 days. An index below 50 indicates more jobs were lost than gained, while a score more than 50 indicates more jobs were gained than lost in the past 30 days.

The Employment index dropped slightly in August '09 to 48.0 from 49.9 in July '09 as a result of increased reported job losses in the past 30 days and a decline in the reported number of new jobs started in this period.

The greatest reported job losses were among those in households earning less than $50,000 (13%) and Latino and Non-White adults (15%).