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Personal Finance Weekly News Roundup November 5, 2022

roundup November 5

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Credit Sesame’s weekly news roundup November 5, 2022. Stories, news, politics and events impacting the personal finance sector during the past week.

  1. The Fed makes another large interest rate hike
  2. Credit indicators show a risk to stability
  3. Diesel fuel looms as the next choke point for the economy
  4. U.S. Bank warns of data breach affecting 11,000 accounts
  5. European inflation hits double digits
  6. Job openings remain at inflationary levels
  7. Construction spending slows in September
  8. U.S. employment continues to grow

1. The Fed makes another large interest rate hike

On November 2, the Federal Reserve announced that it was raising interest rates to a range of 3.75% to 4.0%. This was the fourth consecutive meeting at which the Fed raised rates by 0.75%. The move was expected, based on the fact that inflation remains high and the job market is still very strong. In all, the Fed has raised rates by a total of 3.75% so far in 2022. With one more meeting still to come this year, the Fed signaled that the rate hikes are likely to continue. The official Federal Open Market Committee statement said that “the Committee is strongly committed to returning inflation to its 2 percent objective.” After the meeting, Fed Chair Jerome Powell stated that the Fed’s rate increases still have a way to go. When the Fed next meets in mid-December the question seems to be not whether the Fed will raise rates, but by how much. See FOMC statement at FederalReserve.gov.

2. Credit indicators show a risk to stability

New credit data released by VantageScore shows that while credit scores have held steady, there is possible trouble on the horizon. The average Vantage credit score has remained at 697 for each month since March. However, short-term delinquencies have risen in four of the past five months. These are payments that are 30 to 59 days past due. Short-term delinquencies can be an indication that more serious, long-term delinquency rates are poised to rise. See full report at VantageScore.com.

3. Diesel fuel looms as next choke point for the economy

Diesel fuel inventories are 20% below their normal levels for this time of year. Analysts believe that this will cause shortages over the next six months unless consumption slows significantly. This raises the possibility of a choice between two unappealing alternatives – price spikes because of diesel shortages or a sharp decline in economic activity. Because they impact the transportation of so many other goods, diesel price spikes could cause a broad range of other price increases. See article at Reuters.com.

4. U.S. Bank warns of data breach affecting 11,000 accounts

U.S. Bank is advising some of its current and former customers that sensitive account information may have been compromised. A third-party vendor to the bank accidentally shared information about 11,000 closed credit card accounts. That information included names, Social Security numbers, account numbers and balances. Though US Bank has taken steps to make sure the information has since been retrieved and destroyed, it is advising customers that they may want to monitor their credit especially carefully in the months ahead. See article at NBCNews.com.

5. European inflation hits double digits

The global nature of the inflation problem can be seen in the record high level of European inflation for October. The 12-month inflation rate across the 19 countries participating in the euro currency rose to 10.7% in October, up from 9.9% the previous month. This is even higher than the 8.2% 12-month inflation rate in the U.S. The European Central Bank has raised interest rates by 2% over the past three months in an effort to fight rising inflation. See article at Reuters.com.

6. Job openings remain at inflationary levels

The number of job openings in the United States rose in September, to 10.7 million. Job openings had been trending downward since reaching an all-time high in March. With the uptick in September, there are now two job openings for every person seeking work. This unmet demand for labor is inflationary in two ways. First, it contributes to higher wage costs as employers compete for workers. Second, the large number of unfilled jobs creates shortages for some goods and services, resulting in higher prices. See full news release at BLS.gov.

7. Construction spending grows in September

Despite facing the dual challenges of rising interest rates and the threat of a recession, construction spending grew by 0.2% in September. Over the past 12 months, construction spending is up by 10.9%. Though most of that increase can be accounted for by inflation, growth is strong enough to show construction spending is still rising faster than inflation. Overall construction spending rose in September thanks to private construction projects. Public construction spending actually declined during the month. See full release at Census.gov.

8. U.S. employment continues to grow

The U.S. economy added a net total of 261,000 jobs in October. This is down from the job growth of 315,000 jobs in September, but still considered a solid number. In total, the economy has added over 4 million jobs so far in 2022. For October, the unemployment rate ticked up slightly from its 50-year low, rising to 3.7%. Overall, the unemployment rate is down substantially from 4.6% a year ago. Continued steady growth in the job market was a factor cited by the Federal Reserve earlier in the week as a reason it is willing to continue raising interest rates until inflation starts to ease. See full employment report at BLS.gov.

Weekly News Headlines from Credit Sesame

Richard Barrington
Financial analyst for Credit Sesame, Richard Barrington earned his Chartered Financial Analyst designation and worked for over thirty years in the financial industry. He graduated from St. John Fisher College and joined Manning & Napier Advisors. He worked his way up to become head of marketing and client service, an owner of the firm and a member of its governing executive committee. He left the investment business in 2006 to become a financial analyst and commentator with a focus on the impact of the economy on personal finances. In that role he has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications.

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