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News roundup October 7, 2023

Weekly Personal Finance News Recap - OCTOBER 7, 2023

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Credit Sesame’s personal finance weekly news roundup October 7, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.

  1. Job market posts strongest month since January
  2. Key inflation measure heated up in August
  3. Mortgage rates take another leap higher
  4. Job openings rebounded in August
  5. Construction spending continues strong growth
  6. Gig economy platforms a common source of fraud
  7. Mortgage application slowdown steepens
  8. Over two-thirds of shoppers expect to go over budget this holiday season

1. Job market posts strongest month since January

The Bureau of Labor Statistics reported that the U.S. economy added 336,000 jobs last month. That makes September the best month for job growth since January. Upward revisions of job growth figures for July and August added another 119,000 jobs to the total jobs created this year. The leisure and hospitality sector led the way, with 96,000 new jobs created in September. Overall, September’s addition of 336,000 new jobs was better than the 12-month average of 267,000. This continued sign of economic growth could clear the way for the Fed to follow through with its plans for one more rate hike this year, with inflation remaining a stubborn problem. See news release at BLS.gov.

2. Key inflation measure heated up in August

The Federal Reserve’s key index to track inflation picked up momentum in August. The Personal Consumption Expenditures (PCE) price index rose 0.4% in August, the highest increase since January. That left the PCE price index with a 3.5% increase for the past 12 months, though August’s growth rate would give it a 4.8% increase if continued for an entire year. Core PCE prices, which exclude food and energy costs, were up by just 0.1% in August, but they increased by 3.9% over the past 12 months. The same report showed that the personal saving rate dropped to 3.9% in August. That’s about half the historical saving rate and the lowest rate so far this year. See news release at BEA.gov.

3. Mortgage rates take another leap higher

30-year mortgage rates jumped by 0.18% last week to reach 7.49%. That’s their highest level since December of 2000. This was the fourth consecutive weekly increase for 30-year rates, which are now 1.07% higher than when the year began. 15-year rates also rose last week to reach 6.78%.

4. Job openings rebounded in August

The Job Openings and Labor Turnover report from the Bureau of Labor Statistics showed that the number of job openings rose in August. Previously, the trend had been towards declining job openings. There were 9.6 million jobs open at the end of August. That’s up from 8.92 million at the end of July and exceeded consensus economist expectations. The rise in job openings is mixed news for the economy. On the one hand, it is evidence of the continued resilience of economic growth. On the other hand, it adds to inflation pressures, which have been picking up lately. See article at Yahoo.com.

5. Construction spending continues strong growth

Total year-over-year construction spending is up 7.4%, with pubic construction projects leading the way. Spending on construction projects reached a seasonally adjusted annual rate of $1.98 trillion in August 2023, compared with $1.85 trillion in August 2022. Private construction comprises most of the total, but public construction spending showed a more robust growth rate year-over-year. Private construction is up 5.6%, compared with 14.1% for public construction. One sour note in the Census Bureau report was a decline in residential construction. Total residential construction spending was down 3% year-over-year, reflecting concern about the effect of higher interest rates on demand. See report at Census.gov.

6. Gig economy platforms a common source of fraud

A new study by TransUnion found that the electronic platforms people depend on to tap into the gig economy, such as ride-share and delivery apps, may expose users to fraud. Victims include both consumers and gig economy workers. 24% of those polled said they’d been victims of fraud via one of those platforms, compared with 10% who said they’d been victims of fraud by other means. One-time passcodes are the leading preference among workers and consumers for verifying identity when using these platforms. See news release at TransUnion.com.

7. Mortgage application slowdown steepens

The seasonally adjusted pace of mortgage applications slowed by 6% in just one week. Overall, purchase mortgage applications are down by 22% from a year earlier. That puts mortgage application volume at its lowest level since 1996. Mortgage applications are a key indicator of activity in the housing market. Application volume appears to be reacting to sharp increases in mortgage rates over the past few months. See news release at MBA.org.

8. Over two-thirds of shoppers expect to go over budget this holiday season

A CNET/Money poll found that 69% of shoppers say they are likely to spend more than planned this holiday season. This signals a willingness of consumers to continue heavy spending despite record debt levels and dwindling savings. “Food and beverage” was the leading category in which respondents anticipate overspending. 35% said they expect to overspend in that category, closely followed by “fashion and accessories” at 34% and “electronics and technology” at 33%. See article at CNET.com.

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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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