This report out by the St. Louis Federal Reserve tracks financial health at the zip code level.

They had data across most of the US zip codes for the years 2010, 2015, and 2018. And what they found is that adjacent zip codes can have very different amounts of financial health. Or distress if you're a glass half-empty kind of person.

They tracked several data points, such as total debt (from Equifax consumer data), housing wealth (median home price in the zip code times the number of houses), and stocks & bonds. But they also tracked the number of people within a zip code region who are at or above 80% of their credit limit on their cards.

Working the numbers, they found that neighboring regions can be at different levels of financial health, even though at first glance there's nothing remarkable between them. From 2010 to 2015 the quantity of zip code regions in distress was around 14%. But from 2015 to 2018 the number increased to 58%.

What it looks like is in those zip codes in that year range, people took on a lot of housing debt as well as consumer debt (credit cards). They didn't explore the reasons why, but they're probably easy to guess - declining wages, increasing prices, inability & unwillingness to save.

If we are heading for another major recession (and the indications are there, such as the bond rate inversion) and you're even close to being in the "distressed" category, take steps now to correct your path and prepare for a tough future.

Chip H.