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Personal finance weekly news roundup April 8, 2023

news roundup april 8

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Credit Sesame’s personal finance weekly news roundup April 8, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.

  1. Oil production cut threatens a new boost to inflation
  2. Fewer job openings may reduce inflation pressures
  3. Merrill Lynch hit with $9.5 million fine for not disclosing fees
  4. Health Savings Accounts grew despite tough investment year
  5. Failed banks have caused relatively minor damage in the past
  6. Report shows slower consumer spending in March
  7. 30-year mortgage rates fall while 15-year rates rise
  8. Job growth slower but still solid in March

1. Oil production cut threatens a new boost to inflation

Key oil producers announced plans to reduce their oil production targets. Oil prices jumped by over 5% on the news that supply would be cut. OPEC+, which includes the traditional OPEC cartel plus other key oil producers such as Russia, announced the production cut. The move could provide fresh momentum to inflation just as the pace of price increases had started easing. See Reuters.com.

2. Fewer job openings may reduce inflation pressures

The number of job openings declined for the second consecutive month in February. The Bureau of Labor Statistics reported that there were 9.9 million jobs open at the end of February. That’s a significant decline from the 11.6 million jobs open a year earlier. The latest figure marks the first time the number of job openings has been below 10 million since May of 2021. Despite the recent downward trend, the number of job openings is still very high relative to the number of job seekers. Even so, any easing of labor demand may reduce inflation pressure. That in turn would allow the Federal Reserve to take a less aggressive approach to raising interest rates. See article at Yahoo.com.

3. Merrill Lynch hit with $9.5 million fine for not disclosing fees

The Securities and Exchange Commission (SEC) and Merrill Lynch have reached a $9.5 million settlement over an accusation of inadequate fee disclosure. The SEC alleges that Merrill did not fully disclose charges on foreign exchange trades. The settlement includes giving back $4.1 million that Merrill earned on those charges plus interest and a civil penalty of $4.8 million. See article at Reuters.com.

4. Health Savings Accounts grew despite tough investment year

Both the value of assets in Health Savings Accounts (HSAs) and the number of HSAs grew in 2022, according to a newly-released study. Assets grew by 6% during 2022 to a total of $104 billion, despite a generally poor year for financial markets. This asset growth during a down year was largely driven by new accounts and contributions to existing accounts. The number of HSAs grew by 9%, to a total of 35.5 million. Meanwhile, HSA owners contributed a net total of $13 billion to their accounts. HSAs are a tax-advantaged way of putting aside money for both short-term and long-term healthcare expenses. See article at ABA.com.

5. Failed banks have caused relatively minor damage in the past

An analysis by The Basis Point found that from the more than 560 banks that have failed since 2001, only 7% of deposits were not taken up by another bank. This is an important reminder that failed banks generally have substantial assets to offset most of their liabilities. When a bank fails its assets are often acquired by another bank, which also assumes responsibility for at least a portion of the deposits. This reduces the stress on the FDIC insurance fund. It also leaves uninsured assets less fully exposed to bank failures. See data from TheBasisPoint.com.

6. Report shows slower consumer spending in March

The latest Mastercard SpendingPulse report showed that U.S. retail sales rose by 4.7% in the twelve months through March. This represents a slowdown in the pace of consumer spending after a 6.9% year-over-year increase through February. 4.7% would also suggest that consumer spending has not kept up with the recent rate of inflation. Online sales grew much faster than in-person sales. E-commerce sales were up by 13.0% compared with just 2.8% for in-store sales. See details at Mastercard.com.

7. 30-year mortgage rates fall while 15-year rates rise

30-year mortgage rates had their fourth consecutive weekly decline. They fell by 0.04% last week, to 6.28%. They are now 0.14% lower than they were when 2023 began. In contrast, 15-year mortgage rates increased last week. 15-year rates rose by 0.08% to 5.64%. 15-year rates are now 0.04% lower than they were at the start of this year. See rate information at FreddieMac.com.

8. Job growth slower but still solid in March

The Bureau of Labor Statistics reported that employment grew by 236,000 jobs in March. That’s a slowdown from February’s figure of 326,000 and from the average job growth of 334,000 over the past six months. This might fit the latest report into the “Goldilocks” zone, where job growth is just right – not so hot as to fuel further inflation, but not so cool as to suggest the economy has slipped into recession. See full report at BLS.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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