Here’s how higher Fed rates stand to affect Americans’ finances
Economists and investors foresee the fastest pace of Federal Reserve rate increases since 1989. The result could be much higher borrowing costs for households well into the future.
Economy
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Economic outlook for agricultural economy mixed
Sentiment of the agricultural economy among farmers ticked higher in April, but they are still showing less confidence than they did a year ago, according to the monthly Purdue University/CME Group Ag Economy Barometer.
U.S. employers post record employment openings, job quits
Employers posted 11.5 million job openings in March, more evidence of a tight labor market that has emboldened millions of American workers to seek better paying jobs and contributed to the biggest surge in inflation in four decades.
Key inflation gauge jumped 6.6% in March, most since 1982
Yet, there were signs in Friday’s report from the Commerce Department that inflation might be slowing from its galloping pace and perhaps nearing a peak, at least for now.
Yellen says more shocks likely to ‘challenge the economy’
Treasury Secretary Janet Yellen said Thursday in an address at the Brookings Institution that countries need to build in “recession remedies” to protect people in the U.S. and globally going forward.
U.S. economy shrank by 1.4% in first quarter, but consumers kept spending
The economy’s overall decline in the January-March quarter does not mean a recession is likely in the coming months. Most economists expect a rebound this quarter as solid hiring and wage gains sustain growth.
U.S. consumers still confident, but slightly less so
U.S. consumer confidence dampened slightly in April but remains high even as inflation continues to cloud optimism about the rest of the year.
Why the Fed worries about strongest U.S. job market in decades
As the Federal Reserve sees it, the surge in job postings forces employers to boost wages to attract and keep workers. Those higher labor costs are then passed to customers in the form of higher prices, thereby helping fuel inflation.
Retail sales rose 0.5% in March amid soaring inflation
Soaring prices on everything, particularly at the gas pump, are now making shoppers choosier about how they spend their money.
U.S. inflation jumped 8.5% over past year, highest since 1981
Even excluding volatile food and energy prices, which have driven overall inflation, so-called core inflation jumped 6.5% over the past 12 months, the biggest such increase since 1982.
U.S. inflation might peak in March, but it’s a slow go to Fed’s 2% goal
The Fed last month kicked off what’s expected to be a series of interest rate hikes to tame inflation, but the efforts to temper demand will take time to materialize.
Inflation hitting not-for-profits’ services, ability to fundraise
Not-for-profits of all kinds are getting hurt by inflation, experts say. Price and wage increases are stressing them in multiple ways, making it harder to keep up with their own basic operational expenses while also forcing them to curtail the services they provide.
Biden administration bets strong job market will shield economy from slump
The next few months will test whether President Joe Biden built a durable recovery full of jobs with last year’s $1.9 trillion relief package, or an economy overfed by government aid that could tip into a downturn.
Fed signals more aggressive steps to fight inflation
In minutes from their policy meeting three weeks ago released Wednesday, Fed officials said that half-point interest rate hikes, rather than traditional quarter-point increase, “could be appropriate” multiple times this year.
Yellen: Russia invasion will have ‘enormous economic repercussions’
Treasury Secretary Janet Yellen made her remarks to the House Financial Services Committee. They were part of her annual testimony on the state of the international financial system.
U.S. added 431,000 jobs in March in sign of economic strength
The government’s report Friday showed that last month’s job growth helped shrink the unemployment rate to 3.6%. That’s the lowest rate since the pandemic erupted two years ago and just above the half-century low of 3.5% that was reached two years ago.
Key inflation gauge sets 40-year high as gas and food soar
Squeezed by inflation, consumers increased their spending by just 0.2% in February, down from a much larger 2.7% gain in January. Adjusted for inflation, spending actually fell 0.4% last month.
Even as inflation bites, corporate profits remain flush
Big companies have successfully raised prices for their products because their customers have kept lining up regardless. What’s uncertain is how much longer the trend may last, before customers sharply cut back on their purchases.
U.S. quarterly growth revised slightly lower, to 6.9%
Looking ahead, growth is likely to slow sharply this year, particularly in the first three months 2022. Higher inflation will likely weigh on consumer spending as Americans take a dimmer view of the economy.
Explainer: Bond yields might be warning of upcoming recession
The “yield curve” is watched for clues to how the bond market is feeling about the U.S. economy’s long-term prospects. On Tuesday, a closely followed part of the yield curve gave investors some cause for concern.