Catching Up with the Personal Finance World: March 2024 Edition

Here’s What’s Been Brewing in the Economy

– The Big ‘I’ – Inflation – is On the Move Again
– Producer Price Spikes: A Sign of Inflationary Times
– A Historic High: US Household Wealth Soars!
– New Household Debt Records Begun in 2024
– Real Estate: Mortgage Activity Gets a Boost
– Retail Sales on an Upward Trend
– Interest Rate Relief with Mortgage Rates Dipping
– Consumer Spending Expected to Outstrip Earnings Growth

The Big ‘I’ – Inflation – is On the Move Again

Inflation, that pesky economic thermostat, has been inching upwards for two months straight. February 2024 witnessed a 0.4% jump in the Consumer Price Index, and if we were to extend this over a year, that’s a whopping 4.9% annual inflation rate! Even the core inflation rate matched this 0.4% hike. Comparing these stats with the Federal Reserve’s coveted 2.0% target, we can safely say we’re off the mark!

Producer Price Spikes: A Sign of Inflationary Times

The Producer Price Index too had its share of surprises, with a 0.6% escalation and providing us a forecast of more inflation on the horizon. The rate of increase is at its highest since the previous August and, continued over a year, might mean an annual inflation rate of 7.4%. Commodities seemed to outrun services in the inflation race this time, differing from previous trends, and energy prices emerged the star performer.

A Historic High: US Household Wealth Soars!

Let’s dive into some good news! US household wealth has hit an all-time high at an astonishing $156.2 trillion by the end of 2023, including a 3.2% boost in the 4th quarter. America’s robust stock market, with an 11.7% total return, contributed significantly, which was sufficient to counterbalance the slight depreciations in real estate values.

New Household Debt Records Begun in 2024

The very first month of 2024 set a new record for non-mortgage consumer debt, soaring at an annual rate of 4.7% and reaching a total of $5,039.2 billion. Revolving debts (in layman’s terms, mostly credit card balances) ballooned faster than non-revolving debts, with a 7.6% rise in January. It seems that regardless of the higher costs, consumers have a bit of an affinity for revolving debts over non-revolving ones.

Real Estate: Mortgage Activity Gets a Boost

The mortgage sector seemed to have got a bit of a caffeine shot last week, experiencing a seasonally adjusted boost of 7.1%. Refinancing activities revived with a 12% jump, even with a slight 5% swell in mortgage applications for new home purchases.

Retail Sales on an Upward Trend

Taking a walk into the retail sector, we notice a 0.6% ascension in sales (after seasonal adjustments). This is an impressive comeback from January’s steep decline. Retail sales were 1.5% more robust than the previous year, and food and drink establishments took the lead, with a 6.3% increment in sales.

Interest Rate Relief with Mortgage Rates Dipping

Mortgage rates decided to step back a bit for the second week in a row; the 30-year mortgage rates alleviated to 6.74%, veering clear of the 0.31% increase seen since February commencement. Comparatively, the 15-year mortgage rates trimmed down to 6.16%.

Consumer Spending Expected to Outstrip Earnings Growth

Hold on for some interesting insights from the Federal Reserve Bank of New York’s Consumer Expectation Survey! Apparently, households foresee their spending to surpass their income growth – the average projected increase for spending is 5.2% versus a 3.1% prediction for income. However, pessimism crept into job prospects, with the average chance of losing jobs in the coming year predicted at 14.5%.

A Penny for My Thoughts

Reflecting upon this week’s economic landscape, from rising inflation to record household wealth and burgeoning debt, it’s clear that managing personal finances in the current economical world is akin to walking a tightrope. But remember, with a little knowledge, preparation and resilience, we can navigate the world of finance, leaving room to appreciate the positive milestones along the way.

Stay tuned for more finance news roundups, tailored to help you, the everyday consumer, make sense of these big pictures.

Total word count: 798

Original Article:https://www.creditsesame.com/blog/headlines/roundup-march-16-2024/