Credit Sesame’s personal finance weekly news roundup January 28, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.
- Home sales hit lowest level in a dozen years
- Huge layoffs in tech sector
- Economic outlook improving but still iffy
- Card-not-present transactions account for most credit card fraud
- Euro zone growth rebounds in January
- New analysis projects severe losses if US defaults
- Computer glitch snarls NYSE trading
- US economy continued to grow in 4th quarter
1. Home sales hit lowest level in a dozen years
A report by the National Association of Realtors found that home sales fell to a seasonally-adjusted annual pace of 4.02 million units in December. That was the lowest level since November of 2010. Home sales have now declined for eleven straight months, the longest slump since 1999. December’s home sales figure was 34% lower than the volume a year earlier. While there is hope that a recent slide in mortgage rates might improve housing demand, those rates are still considerably higher than they were a year ago. See article at Yahoo.com.
2. Huge layoffs in tech sector
Leading technology companies which have often been the strongest parts of the economy in recent years have announced a series of mass layoffs this January. Alphabet, the parent company of Google, joined the parade of job cutters on January 20. It announced that it would be cutting 12,000 jobs, which represents 6% of its workforce. Amazon, Microsoft, and Meta (Facebook’s parent) are among the other tech companies that have also announced layoffs of thousands of employees recently. The US has seen job growth for 24 straight months now, but the spate of large-scale layoffs in January may threaten that winning streak. See article at Reuters.com.
3. Economic outlook improving but still iffy
A survey of businesses found most still think a recession is likely, but there are fewer pessimists than there were a few months ago. The survey by the National Association of Business Enterprises (NABE) found that 56% of respondents thought the US economy was either already in a recession or likely to enter one in the next 12 months. That slim majority of businesses that expect a recession is much narrower than it was three months ago. In the previous NABE poll, 64% of respondents thought the US was either already in a recession or likely to enter one in the next year. See article at Reuters.com.
4. Card-not-present transactions account for most credit card fraud
Credit card theft usually doesn’t involve taking the actual credit card, according to Insider Intelligence. In 72.0% of the fraudulent credit card transactions last year, the thief needed only the credit card information and not the actual credit card. Card-not-present fraud totaled 8.75 billion last year, up by 11.3% from 2021. Not surprisingly, the biggest jump in card-not-present fraud occurred in conjunction with the huge increase in e-commerce that occurred in 2020. Card-not-present fraud is projected to grow by a further 8.5% this year, to $9.49 billion. See article at InsiderIntelligence.com.
5. Euro zone growth rebounds in January
An S&P Global purchasing manager’s index found that as a group, euro zone business activity returned to modest growth this month. This marks the first time since June that the survey’s composite was at a level indicating economic growth. The January reading exceeded expectations. At one time, economists felt a recession in Europe was inevitable. Now there is hope it might be avoided, or at the very least, be relatively mild. See article at Reuters.com.
6. New analysis projects severe losses if US defaults
A new analysis by Moody’s outlines the severe damage that could result if the US defaults on its financial regulations. As Congress considers facing that risk by not raising the debt ceiling, the Moody’s study found that the economy could shrink by 4% if a default occurs. Moody’s expects that would result in the loss of 6 million jobs, and a 33% plunge in the stock market. See article at Yahoo.com.
7. Computer glitch snarls NYSE trading
A computer glitch at the start of trading on January 24 caused the cancellation of trades in over 250 stocks on the New York Stock Exchange (NYSE). Prominent names such as McDonalds, 3M, ExxonMobil and Walmart were among the stocks whose trades were affected. The breakdown in trading was amplified by the fact that NYSE prices are used as the basis for trading on 16 different stock exchanges around the country. The computer problem affected auction-based trading. This raises broader concerns because the Securities and Exchange Commission is considering routing more retail trades through auction trading. See article at Reuters.com.
8. US economy continued to grow in 4th quarter
Despite all the economic challenges of the past year, the US economy ended 2022 on a positive note. The Bureau of Economic Advisors (BEA) announced that inflation-adjusted US GDP grew at a 2.9% annual rate in the fourth quarter. That’s down slightly from the 3.2% rate in the third quarter, but it was a little better than economists generally expected. For the year, GDP grew by 2.1% after inflation. That’s a much slower rate than the 5.9% increase in 2021. Still, it represents a solid turnaround after the economy actually shrunk slightly in the first half of 2022. The BEA’s January 26 GDP release is an advance estimate and subject to change. Updates will be issued in late February and late March. See full release at BEA.gov.
Weekly News Headlines from Credit Sesame
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