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Misery Index Reaches 18-Year High

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Take the unemployment rate, add the inflation rate, and here’s what you get: The misery index. It’s an imperfect barometer, but it does give a flavor of what consumers are experiencing.

And misery is on the rise. The misery index reached 13.0 on Wednesday, its highest level since 1983. Increasing levels of financial misery could be especially bad news for people with credit card debt.

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“People that are underemployed or unemployed are more likely to use their credit cards to pay for everyday things like food, gas and clothes for their kids,” says Beverly Harzog, Credit.com’s credit card expert. “If they can’t pay the credit card bill at the end of the month, they get caught in a debt cycle, and that adds to their misery.”

The misery index rose on Wednesday based on a report by the Bureau of Labor Statistics, which found that consumer prices increased 3.9 percent over the last year. The bureau’s latest jobs report found that unemployment held steady in September at 9.1%.

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Add the two together, and there you have the completely unscientific, but still somehow informative, misery index of 13.0. According to the Obama administration’s economic prognosticators, Americans should experience slightly less misery in the near future, but the improvement will be slow. More people will find jobs, the administration believes, but that will also cause inflation to rise.

“The overall unemployment rate is projected to decline over the course of 2011-2014, as the growth rate accelerates,” according to the White House’s 2012 budget analysis, “but unemployment is not projected to drop below 6 percent until 2015.”

[Related article: Knee-Deep in Debt? Here’s a Resource]

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