Personal finance weekly news roundup August 17, 2024 ~ Credit Sesame

Credit Sesame’s personal finance news roundup August 17, 2024. Stories, news, politics and events impacting personal finance during the past week.

Inflation ticked up but still moderate in July 2024

The Consumer Price Index rose by 0.2% in July. That’s the highest monthly increase since April 2024. Still, if continued, it would represent an annual rate increase of just 2.4% rate of increase. That’s less than the 2.9% increase over the past 12 months. Prices for shelter and transportation services experienced the biggest increases in July, each rising by 0.4% during the month. See inflation summary at BLS.gov. 

Americans now worse off because of the pandemic

Households are now worse off financially than they’d have been if there had been no pandemic. This is based on liquid wealth, adjusted for inflation. Initially, pandemic financial assistance and restrictions on spending helped US households build up a significant cushion of liquid wealth. Since then, though, rapid spending and high inflation have wiped out that cushion. Compared to a projection of real liquid wealth if the pandemic never happened, the top 20% of earners are now 2% worse off. The bottom 80% of earners have lost even more ground and are 13% worse off. See research paper at FRBSF.org.

Credit card customers prefer to get cash back

A JD Power survey of credit card customers found that most prefer cashback cards to other rewards. 58% of credit card customers use cashback cards, compared to 31% who use points or miles-based rewards cards. 11% use cards that offer no form of rewards. Customer attitudes towards credit cards depend on their financial health. Overall customer satisfaction with credit cards rose among customers classified as financially healthy, while it fell among those classified as financially unhealthy. Cardholders who carry debt are less satisfied with their cards than those who do not. See survey findings at JDPower.com.

Mortgage applications rise as rates drop

Following a sharp drop in mortgage rates the previous week, applications for home loans rose by a seasonally adjusted 16.8% last week. Refinancing experienced a powerful surge in popularity. Refinancing applications rose by 35% last week and were 118% higher than the same week a year ago. In contrast, applications for home purchase mortgages rose b 3%, and were actually 8% lower than a year earlier. See details at MBA.org.

Are banks responsible for Zelle fraud?

Zelle, a popular peer-to-peer payment platform, has often been used to defraud consumers. Scammers induce victims to make payments via Zelle based on various fraudulent pretexts. Zelle is owned by a group of seven major US banks. The Consumer Financial Protection Bureau is investigating how responsible those banks are for facilitating these scams. The focus is on whether banks should reimburse money lost, even if the customer authorized the transaction. See article at Yahoo.com.

Consumer spending expectations ease as they struggle to pay bills

The New York Fed’s Survey of Consumer Expectations found that planned spending growth for the year ahead fell by 0.2% to 4.9%. That’s the lowest level of expected spending growth since April of 2021. Still, it is higher than the 3% expected growth in household income. The percentage of consumers who expect to miss a debt payment over the next three months increased to 13.3%. This is the highest level since April of 2020. See details at NewYorkFed.org.

Rate of producer price increases slowed in July 2024

The Producer Price Index was up by a modest 0.1% in July. This represents a slower pace of price increases after June’s 0.2% increase. For the past 12 months, producer prices are up by just 2.2%. In a reversal of the recent trend, producer prices for goods increased in July while producer prices for services decreased. See details at BLS.gov.

Home prices continued to rise in Q2 2024

Most US home prices continued to rise in the second quarter of 2024. Nearly 90% of US metropolitan areas reported price gains during the quarter, with the housing market in Racine, WI, experiencing the fastest gain (19.8%). The median home price in San Jose, CA, the nation’s most expensive market, surpassed $2 million for the first time. The median home price is now $422,100, up 5% from a year ago. However, the pace of home price increases has slowed. See article at NAR.realtor.

Americans very concerned about financial fraud

A new survey found that 90% of Americans are worried about the rise of financial fraud, with 51% calling themselves extremely concerned and 39% calling themselves somewhat concerned. 45% of survey respondents said that they had been victims of financial fraud, with credit card fraud the most common type of this crime. Most respondents feel the development of artificial intelligence will increase both the occurrence and the success rate of financial crime. See article at Yahoo.com.

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