Debt Settlement USA, a Phoenix-based debt settlement company, launched a Consumer Debt Index on Wednesday. It is a quarterly statistical analysis that measures the degree to which American consumers are suffering under an increasing burden of credit card, car payment, mortgage and other debt. In the first quarter of 2008, the index stood at 11.76, up 22% over the second quarter of 2007 when it was 9.60. This index is calculated based on a combination of the Consumer Price Index, consumer credit outstandings, mortgage delinquency rate and unsecured consumer loan delinquency rate. Since the second quarter of 2007, when the company began combining the aforementioned metrics, each index component has increased. For example, the mortgage delinquency rate soared by 67.7% and the consumer loan delinquency rate rose 18.6%. The level of outstanding consumer debt increased 4% and the Consumer Price Index grew from 2.08 to 2.12. However, the index's increases have softened since the June quarter of 2007. It rose 2.7% in the first quarter of 2008, after rising about 9% in the third and fourth quarters of 2007. "The Consumer Debt Index reflects an alarming trend for consumers who are trying to get out of debt. Clearly, people are increasingly unable to pay their credit card bills and mortgages," Debt Settlement President Jack Craven said in a statement. The CDI is calculated each quarter by adding the quarterly average of the U.S. Department of Commerce's monthly Consumer Price Index, the Federal Reserve's quarterly average of consumer credit outstandings, and the Fed's quarterly mortgage delinquency and unsecured consumer loan delinquency rates.
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