Credit Sesame’s personal finance news roundup October 19, 2024. Stories, news, politics and events impacting personal finance during the past week.
Debt fears grow in September 2024
A September 2024 survey by the Federal Reserve Bank of New York found that respondents had an increased fear of missing a debt payment within the next three months. The expectation of probably missing a payment rose from 13.6% to 14.2% in August. That was the fourth consecutive monthly increase in the fear of missing a debt payment. This has resulted in the highest percentage since April 2020. Despite this growing concern over debt, survey respondents expect spending to grow faster than income over the next year. See details at NewYorkFed.org.
Spending has risen faster than inflation since the pandemic ended
A new study by the Federal Reserve found that consumer spending has risen faster than inflation across all income levels since the first stages of the pandemic. In the first few months of the pandemic, shutdowns initially slowed spending, but consumer activity quickly recovered and soon surpassed pre-pandemic levels. The increase in spending has exceeded the rate of inflation. Even after adjusting for inflation, consumer spending is now 14.69% higher than at the beginning of 2018. Higher-income households have boosted spending the most. Spending by people with incomes over $100,000 a year has risen by 16.72% more than inflation. Inflation-adjusted spending for incomes from $60,000 to $100,000 is up 13.31%. For incomes below $60,000, it is up 7.89%. See study at FederalReserve.gov.
FTC proposes making it easier to cancel subscriptions
In October 2024, the Federal Trade Commission announced new rules that would make it easier for consumers to manage and cancel subscriptions. Streaming services and others offering subscriptions would have to disclose when free trial periods were ending. It would also require customer consent before charging fees after a free trial period or automatically renewing a subscription. It would also require that it would be as easy to cancel a subscription as it is to sign up for one. The new regulations have been dubbed “click-to-cancel” for their ease-of-use requirements. The click-to-cancel rules would go into effect 180 days after publication. See article at Yahoo.com.
Fraud totals nearly 7% of business revenues in the US
A multi-national analysis by credit bureau TransUnion found that over the past year, losses due to fraud totaled 6.5% of the revenues of businesses surveyed. The percentage is slightly higher in the US, where fraud losses reached 6.7% of revenues. Authorized fraud, in which a person is tricked into directing the transfer of something valuable, is the most common type of fraud reported. This represented 31% of the global total, and 35% of the US total. The report also identified synthetic identity lending as a fast-rising type of fraud. This involves a scammer opening a credit account using a made-up identity. See news release at TransUnion.com.
Rent plays growing role in credit scores
Now that rent payments can be reflected on credit reports, many property managers are reporting these payments. The number of property managers who report rent payments to credit bureaus jumped by 33% in the past year. Most of those who report rents only started doing so within the past two years. The practice is making a significant difference. 84% of the tenants surveyed whose rents were reported to credit bureaus said their credit scores increased. See report at TransUnion.com.
Retail sales accelerated in September 2024
The Commerce Department reported that retail sales gained momentum in September. Unadjusted for inflation, total retail sales rose by 0.4% during the month. This was a bigger increase than economists had expected and represents a faster pace of growth than August’s 0.1% increase. 10 of 13 retail categories showed increases for the month. A notable exception was revenue at gas stations, but this was largely due to lower gas prices. The ongoing strength in consumer spending makes it likely that GDP grew in the third quarter of 2024. See details at Yahoo.com.
Mortgage rates rise again
30-year mortgage rates rose for a third consecutive week. This time they rose by 0.12% to reach 6.44%. 15-year rates have now risen for four straight weeks at 5.63%. The recent rebound in 30-year rates puts them a total of 0.36% higher than they were at the end of September, though they are still 0.17% lower than when the year began. See rate details at FreddieMac.com.
Weekly news headlines from Credit Sesame
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