US Economy Stable while Healthcare Distress Increases

The Polsinelli|TrBK Distress Indices for the 3rd quarter of 2017 were released today. Indices suggest that the overall economy and real estate markets remain stable at historically low levels of distress, both indices were little changed from the second quarter and both remain significantly lower than the 2010 index year. The Chapter 11 Distress Research Index was 42.74 for the third quarter of 2017, an increase of nearly 2 points over the second quarter and just over 57 point below the number reached is 2010. The index is less than 5 points above the all time low recorded in the second quarter of 2015. The Real Estate Distress Research Index was 25.16 for the third quarter of 2017. This is approximately the same as the last quarter and nearly 75 points below the number reached in 2010.

At the same time, the Healthcare Index notched another record of 223.33 points in the third quarter. This is the highest level ever for the index with a gain of approximately 15 points over the prior quarter and 123 points over the level recorded in 2010. Nearly twice as many healthcare bankruptcies were filed in the third quarter of 2017 as compared with the same time period in 2016.

The Polsinelli|TrBK Distress Indices are research indices based on Chapter 11 bankruptcy filing data. The indices are contrarian measures of economic performance, so that a low index value is likely to occur in a strong economy, and a higher index value is likely to occur when financial distress is escalating. Thus, the indices are one indicator intended to suggest potential health or trouble in the economy. The indices track the increase or decrease in comparative Chapter 11 filings for prior quarters and years. The indices provide economic information that may not be reflected by the broader stock market averages, because the indices include both public and private company information.

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