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News roundup April 20, 2024

personal finance news roundup April 20 2024

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Credit Sesame’s personal finance news roundup April 20, 2024. Stories, news, politics and events impacting personal finance during the past week.

  1. Consumer debt payments show rare improvement
  2. Today’s economy has more workers turning to side hustles
  3. Fed reports modest growth and encouraging news on inflation
  4. Report measures economic boost from the eclipse
  5. Lack of personal finance knowledge costs Americans money
  6. 30-year mortgage rates surge past 7%
  7. Full-time income outpaced inflation over the past 12 months

Consumer debt payments show rare improvement

Late payment rates on consumer debts declined in March. This is contrary to the longer-term trend. Late payment rates for auto loans, credit cards, mortgages and personal loans all fell from their February levels. However, late payments in each of these categories are still higher than they were a year ago. There was also an indication consumers may have favored more cost-effective forms of credit in March. The average balance on credit cards fell, while average balances on mortgages and personal loans increased. Credit cards are generally much more expensive than mortgages and personal loans. However, this may only be a short-term improvement. While it declined in March, the average credit card balance is still up from where it was a year ago. See credit snapshot at TransUnion.com.

Today’s economy has more workers turning to side hustles

More than 1 out of every 5 American workers has a job on the side, with younger Americans especially likely to turn to side hustles. As of February, 22% of workers had taken on at least one extra job. 32% of Gen Z workers had taken on additional work. Some people do this to make ends meet. 53% of people with side jobs reported living paycheck to paycheck, and 30% said losing the extra income would threaten their financial stability. However, other people are approaching extra work opportunistically. 22% of high earners reported receiving additional income from side hustles. This exceeded the 20% of higher earners who reported getting additional income from investments. See details at FoxBusiness.com.

Fed reports modest growth and encouraging news on inflation

The Fed’s latest “Beige Book” report on economic activity portrayed slow growth and a possible lessening of inflation pressures. 10 of the 12 Federal Reserve districts covered in the report said economic growth had been slight or modest since late February. Consumer spending increased slightly, but discretionary spending appeared weaker. On the inflation front, conflict in the Middle East and the collapse of Baltimore’s Key Bridge caused shipping delays but no significant price increases so far. Several districts reported that retailers had more difficulty passing price increases on to consumers. See summary at ABA.com.

Report measures economic boost from the eclipse

An analysis by the Mastercard Economics Institute measured the economic impact of the recent solar eclipse over North America. The study compared actual economic activity with an estimate of everyday activity without the eclipse. This approach was applied across 13 states in the path of totality for viewing the eclipse. In the days surrounding the eclipse, fuel sales in these states were 7% above normal, dining sales were up 27%, and hotel sales were up 71%. The report did not cover whether there was any offsetting decline in economic activity in areas outside the path of totality. See report at Mastercardservices.com.

Lack of personal finance knowledge costs Americans money

A survey by Experian found that most Americans feel that gaps in their financial knowledge are proving costly. 60% of respondents said they had made mistakes due to inadequate credit or personal finance knowledge. Most who say they’ve made mistakes admit their misjudgments have cost them $1,000 or more. Reports of mistakes due to a lack of understanding were exceptionally high among Millennial and Gen Z respondents. Americans feel that financial knowledge should be more thoroughly addressed in schools. 78% of respondents believe personal finance should be a required subject in high schools, but it is only mandatory in half the states. See news release at Experian.com.

30-year mortgage rates surge past 7%

30-year mortgage rates rose by 0.22% this week to reach 7.10%. That was the largest weekly increase so far in 2024. It put 30-year rates above 7% for the first time since December 7, though they are still well below the 7.79% peak in October 2023. 15-year mortgage rates rose by an even greater amount this week. 15-year rates rose by 0.23% to reach 6.39%. See rate information at FreddieMac.com.

Full-time income outpaced inflation over the past 12 months

The Bureau of Labor Statistics reported that the median weekly income of full-time workers was $1,139 during the first quarter of 2024. That represented a 3.5% increase from a year earlier. That income growth rate would have kept workers slightly ahead of inflation, as the Consumer Price Index rose 3.2% over the same period. See 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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