Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
Painless disinflation is looking less likely (Feb. 24, Axios) There is little doubt at this point that the Fed has the resolve to keep raising interest rates if inflation pressures don’t dissipate. But it is looking more likely that it will take a more serious economic downturn than seen so far to make that happen.
Apartment Rents Fall as Crush of New Supply Hits Market (Feb. 27, Wall Street Journal) Apartment rents fell in every major metropolitan area in the U.S. over the past six months through January, a trend that is poised to continue as the biggest delivery of new apartments in nearly four decades is slated for this year.
Nearly half a million new apartments are coming on line this year as developers seek to cash in on the high rents that tenants have been paying.
Home-Price Growth Slowed in 2022 (Feb. 28, Wall Street Journal) Home-price growth decelerated in 2022 after a rapid rise in mortgage rates priced many buyers out of the market.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, rose 5.8% in the year ended in December, down from a 7.6% annual rate the prior month. The increase was the lowest December-to-December change since 2019.
Long-Robust U.S. Labor Market Shows Signs of Cooling (March 1, Wall Street Journal) ZipRecruiter Inc. and Recruit Holdings Co., two large online recruiting companies, say their data show the number of job postings is declining more than Labor Department reports of job openings.
Robust government data on job openings and hiring are among the reasons Federal Reserve officials believe the U.S. economy is overheated, fueling high inflation.
Low-income households are falling behind on car bills (March 1, Axios) The share of payments on so-called “subprime” auto loans that were at least 60 days late rose to more than 6% in December. Subprime loans have high interest rates and are typically made to people with low credit scores.
The uptick reflects a steady weakening of the finances of poorer American households.
US Jobless Claims Edge Lower in Sign of Strong Labor Market (March 2, Bloomberg) Applications for US unemployment benefits eased last week and a measure of labor costs remained firm in the closing months of 2022, highlighting a tight job market that’s contributing to inflationary pressures.
Separate figures showed unit labor costs climbed an annualized 3.2% in the fourth quarter, nearly three times the preliminary estimate.
More Interest-Rate Hikes Are Needed to Cool Inflation, Fed’s Collins Says (March 2, Bloomberg) Boston Federal Reserve Bank President Susan Collins said policymakers need to keep raising interest rates to get inflation under control, though exactly how much higher borrowing costs need to go will hinge on incoming data.
Home Prices Are Finally Falling. And They’re Headed Even Lower This Spring. (March 2, Barron’s) The median home in metropolitan areas tracked by Redfin sold for $350,246 in the four-week period ended Feb. 26, according to Redfin data. That represents a 0.6% decline compared with the same period a year before.
The recent declines won’t be the last, said Redfin chief economist Daryl Fairweather. “I think for most of spring, home prices are going to be lower than what they were this time last year,” she said.
Inflation data pushed the 10-year Treasury yield above 4%. How much higher can interest rates go? (March 2, MarketWatch) Signs of continued U.S. labor market strength plus persistent inflation out of Europe were all it took on Thursday for bond investors to push yields up toward new milestones as interest-rate expectations continued to be readjusted.
The 10-year yield finished New York trading at 4.072%, the first time that it’s ended above 4% since Nov. 9, 2022. Prior to October to November of last year, the yield hasn’t consistently traded above 4% since 2007-2008.
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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.