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News roundup September 9, 2023

Weekly Personal Finance News Recap - SEPTEMBER 9, 2023

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Credit Sesame’s personal finance weekly news roundup September 9, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.

  1. Mastercard denies it has plan to raise credit card fees
  2. New credit card scam targets travelers
  3. Labor force constraints expected to slow employment growth
  4. Oil hits 10-month high
  5. Mortgage rates ease off their peak but remain above 7%
  6. Productivity increases while hours worked decline
  7. Mortgage application volume lowest since 1996

1. Mastercard denies it has plan to raise credit card fees

Mastercard issued a statement denying a report that it was planning to raise the interchange fees it charges merchants when a customer uses a credit card. Visa also released a blog post calling the news misleading. Based on a Wall Street Journal report, word of the supposed fee increase was widely circulated last week. The controversy may represent public relations tactics in an ongoing information battle between credit card companies and merchants over fees. See article at Reuters.com.

2. New credit card scam targets travelers

A new credit card scam is victimizing newly arrived travelers at hotels. The way it works is that a newly arrived hotel guest will receive a call claiming to be from the front desk. The caller will claim there has been a problem with the credit card information provided and ask the guest to give the credit card number and CVV digits over the phone. This will have been a fraudulent call designed to get that credit card information. Hotel guests receiving credit card information requests should hang up and call the front desk directly or go down to the front desk to resolve any issues in person. See article at CountryHerald.com.

3. Labor force constraints expected to slow employment growth

The Bureau of Labor Statistics has released projections that show it expects the job market to continue to grow over the next decade but at a slower rate than over the past ten years. The U.S. is expected to add 4.7 million jobs from 2022 to 2032. This would bring total employment to 169.1 million. That increase would represent a 0.3% annual growth rate, slower than the 1.2% annual growth over the past decade. There are a few different reasons for the slower growth. For one thing, the past decade has represented a time of recovery from the job losses of the Great Recession. Also, the population is expected to grow more slowly over the next ten years than in past decades. Finally, as baby boomers age, a smaller proportion will continue participating in the labor force. See news release at BLS.gov.

4. Oil hits 10-month high

Oil prices climbed above the $90-a-barrel mark this week for the first time since November 2022. The price of oil has generally been rallying over the past several weeks. The latest surge came on news that Russia and Saudi Arabia would extend their production cuts till at least the end of the year. The curtailed oil production has been orchestrated to drive prices higher. Rising oil prices raise fears of a revival of inflation after several months of moderate price gains. See article at Yahoo.com.

5. Mortgage rates ease off their peak but remain above 7%

30-year mortgage rates fell for the second consecutive week. This week, they declined by six basis points to 7.12%. They peaked two weeks ago at 7.23%, their highest level since June 2001. 30-year rates remain a full percentage point above where they were a year ago. 15-year rates also fell this week after being unchanged the previous week. Those shorter mortgage rates fell by three basis points to 6.52%. 15-year mortgage rates had hit a high of 6.55% two weeks ago, their highest level since April of 2002. See details at FreddieMac.com.

6. Productivity increases while hours worked decline

According to an updated estimate from the Bureau of Labor Statistics, labor productivity increased by 3.5% in the second quarter of 2023. Over the long haul, productivity gains can help control inflation and improve workers’ wages. The increase in productivity occurred even as the number of hours worked fell by 1.5% after seasonal adjustment. With total employment remaining strong, the decline in hours worked was due to a drop in the average weekly hours worked. See details at BLS.gov.

7. Mortgage application volume lowest since 1996

The number of mortgage applications fell last week to its lowest since December 1996. This continues the steady slide in mortgage volume as interest rates have risen. Refinancing has less appeal at higher interest rates, and fewer would-be buyers can afford to purchase a home at today’s rates. Also, many potential sellers with mortgages are reluctant to make a move because it would mean trading a low-interest mortgage for a higher-interest one. As a result, refinancing application volume is 30% lower than a year ago, and purchase applications are down 28%. See details at MBA.org.

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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