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News roundup March 30, 2024

personal finance news March 30 2024

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Credit Sesame’s personal finance news roundup March 30, 2024. Stories, news, politics and events impacting personal finance during the past week.

  1. New home sales slip in February 2024
  2. Senate approves funding to avoid shutdown
  3. Possible settlement reached on swipe fees
  4. Inflation continues to weigh on consumer confidence
  5. Walmart parts company with Capital One as exclusive credit card provider
  6. 2023 fourth quarter GDP a even better than originally thought
  7. Mortgage rates continue zig-zag pattern
  8. Inflation is still running above target

New home sales slip in February 2024

After seasonal adjustment, US sales of newly constructed, single-family homes declined by 0.3% in February. New homes sold at an annualized pace of 662,000 units last month. Economists surveyed before the announcement had expected the pace of home sales to be 675,000 units in February. New home sales represent roughly 10% of the total home sales volume. Despite higher interest rates, new home sales have risen by 5.9% over the past year. This is partly because of a short supply of existing homes on the market. See article at Yahoo.com.

Senate approves funding to avoid shutdown

The US Senate passed a $1.2 trillion funding bill to avoid a government shutdown. While the emergency measure follows months of political gamesmanship over government spending, the funding compromise has received strong support. 75% of Senate voters chose to approve it. Previously, 68% of the House of Representatives voted in favor. President Biden is expected to sign the bill into law. The provision should delay any further threats of a government shutdown until the fall. See article at Yahoo.com.

Possible settlement reached on swipe fees

Visa and Mastercard reached a tentative agreement with merchants’ representatives to settle a lawsuit over interchange fees, commonly known as swipe fees. The proposed settlement would 1) reduce some current swipe fees, 2) limit future swipe fee increases, and 3) prevent credit card companies from requiring merchants to use their transaction processing systems. The proposed settlement still needs to be approved by the judge presiding over the case. See article at Reuters.com.

Inflation continues to weigh on consumer confidence

The Conference Board’s Consumer Confidence Index took a slight hit this month. The overall index dropped by 0.1 points in March to 104.7. Also, February’s original estimate was revised downward. The overall index includes readings on consumer confidence about current and future conditions. The Present Situation Index actually increased by 3.4 points in March. However, the Expectations Index dropped by 2.5 points to 73.8. Expectations Index levels below 80 have traditionally been associated with recessions. Inflation remains a concern for consumers. Consumers expect a 5.3% inflation rate for the next 12 months, even though the year-over-year rate has consistently been below 5% since last March. See details at Conference-Board.org.

Walmart parts company with Capital One as exclusive credit card provider

A federal judge ruled that Walmart could terminate an agreement that had made Capital One the exclusive provider of Walmart-branded credit cards. The terms of the agreement allowed Walmart to terminate the agreement early if Capital One repeatedly failed to meet customer service standards. The judge ruled that Capital One’s failures were sufficient to trigger the agreement’s escape clause. Besides the lost business, the rejection is a bad look for Capital One as it seeks approval for its proposed takeover of Discover. See article at Reuters.com.

2023 fourth quarter GDP a even better than originally thought

Original estimates of GDP growth for the final quarter of 2023 showed the economy’s continued strength. The latest revision of those estimates showed growth was even better than previous estimates. The third of the usual three quarterly estimates of GDP showed the US economy grew at a 3.4% annual pace in the fourth quarter, after adjustment for inflation. That’s better than the 3.2% previously estimated. Non-durable goods manufacturing and retail trade were the biggest contributors to the fourth quarter’s growth. See GDP report at BEA.gov.

Mortgage rates continue zig-zag pattern

30-year mortgage rates fell by 0.08% last week to 6.79%. This was the fourth consecutive week that rates have alternated between rising and falling. Longer-term, 30-year rates have fluctuated from 6.60% to 6.94% so far in 2024, following a steep decline in the last couple of months of 2023. This suggests rates have found their natural level until there is a decisive change in the inflationary trend. See rate information at FreddieMac.com.

Inflation is still running above target

The Personal Consumption Expenditures (PCE) price index rose 0.3% in February 2024. The PCE price index is the measure of inflation most closely followed by the Federal Reserve. The PCE price index differs from the Consumer Price Index (CPI) in that it adapts to changes in consumer spending habits more quickly. The PCE price index measure of inflation was slightly below the CPI reading for February of 0.4%. Even so, 0.3% monthly inflation would project a 3.7% annual inflation rate, well above the Fed’s target of 2.0%. See report at BEA.gov.

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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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