Credit Sesame’s personal finance news roundup July 6, 2024. Stories, news, politics and events impacting personal finance during the past week.
Job growth streak continues
Total US employment grew by 206,000 in June 2024. This means there have been 42 consecutive months of job growth. June’s job growth of 206,000 was a little below the 12-month average of 220,000. The latest employment report revised down job growth totals for both April and May by unusually large amounts. There were 111,000 fewer new jobs in those two months combined than previously thought. See employment situation report at BLS.gov.
Inflation is slowing but not enough to cut rates
Jerome Powell, Chair of the Federal Open Market Committee, noted that recent inflation readings showed signs that inflation is slowing. However, he added that the Fed needs to see more evidence before it concludes that inflation is on its way down to the Fed’s 2% target. He said that the strong job market allows the Fed to be patient about when to cut rates. Powell’s comments seemed to signal that the Fed won’t cut rates at its next meeting, which occurs at the end of this month. After that, there are three more scheduled meetings this year when the Fed could begin to cut rates. See article at Yahoo.com.
Job openings trends were stable in May 2024
Trends for job openings and labor turnover were largely unchanged in May 2024, according to newly released data from the Bureau of Labor Statistics. On a seasonally adjusted basis, there were 8.1 million job openings at the end of May. That’s up slightly from 7.9 million as of the end of April but lower than the 9.3 million openings a year earlier. The number of unemployed persons per job opening remained at 0.8. This ratio of job-seekers to job openings has risen from a low of 0.5 percent during much of 2022 and early 2023. That scarcity of job seekers has been cited as a contributing factor to inflation. See details at BLS.gov.
40% of Americans at risk of running out of money in retirement
According to the head of TIAA, a retirement security organization for teachers, 2 out of every 5 Americans risk running out of money in retirement. A root cause is that much of the US retirement system is based on paying a lump sum to workers upon retirement rather than an ongoing income amount. Retirees who don’t have a good plan for making that money last often find they outlive their retirement funding. This can cause a multi-generational problem, as children of destitute retirees have to step up and pay some of their expenses. This can leave those children short of retirement savings, thus perpetuating the problem. See article at Yahoo.com.
5. EU imposes heavy tariffs on Chinese EVs
Echoing a similar move by the US government, the European Union (EU) has imposed steep tariffs on electric vehicles (EVs) made in China. The new measure adds as much as 37.6% to the price of EVs imported from China to the EU. China has become a leading manufacturer of affordable EVs. Critics say that Chinese EV makers have benefitted from state subsidies. The EU move is designed to protect European manufacturers. Another criticism is this could help fuel the global inflation trend and contribute to global warming, as blocking the import of low-cost EVs slows the transition from gasoline-powered vehicles. China has threatened to retaliate with tariffs on imports from the EU. See article at Reuters.com.
6. Interest rates rise on speculation over Trump win
President Joe Biden’s poor debate performance has led to a jump in bond rates in the days since that debate. The rise in bond yields is all the more striking because it reversed a steady decline previously. Investors are fleeing bonds on the premise that the policies promised by Republican candidate Donald Trump would lead to higher bond yields. Trump has vowed to raise tariffs, which is fundamentally inflationary for US consumers. Higher inflation forces interest rates higher. Also, the tax cuts that are part of Trump’s platform would likely worsen the federal budget deficit. This could lead to more concern about the creditworthiness of the US government, making Treasury bonds less attractive. See article at Yahoo.com.
7. New law forgives medical debt for 300,000 Illinois residents
Illinois has passed a law that will forgive outstanding medical debts for 300,000 residents of the state. Unlike other recent measures that have targeted medical debt, this law will do more than just remove the debt from credit reports. Instead, the state will purchase the debt from the creditors who currently hold it. Then it will forgive that debt for qualifying individuals. To qualify, someone must have household income that’s less than four times the federal poverty level or have medical debt that’s more than 5% of their annual household income. See article at NBCChicago.com.
8. Mortgage rates rise for the first time since May 2024
30-year mortgage rates rose for the first time in five weeks last week. They increased by 0.09% to 6.95%. Even with the increase, 30-year rates are still well below their recent peak of 7.22%, though they are 0.34% higher than they were at the start of 2024. See rate details at FreddieMac.com.
Weekly news headlines from Credit Sesame
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