Personal Finance News

U.S. Household Debt Exceeds $14 Trillion for the First Time

February 12, 2020 Leave a Comment

Total U.S. household debt rose by $601 billion in the fourth quarter from a year earlier, or 1.4%, surpassing $14 trillion for the first time, the New York Fed’s quarterly household credit and debt report showed. Bloomberg reports:

That’s $1.5 trillion above the previous peak in the third quarter of 2008. Overall household debt is now 26.8% above the second-quarter 2013 trough.
Mortgage borrowing rose by $120 billion to $9.56 trillion. The rate for a 30-year mortgage has fallen by about 100 basis points over the past year, adding to home purchasers’ buying power. For example, a $500,000, 30-year loan costs about $300 less per month.
“Mortgage originations, including refinances, increased significantly in the final quarter of 2019,” Wilbert Van Der Klaauw, vice president at the New York Fed, said in a statement.

Record 90% of Americans Satisfied With Personal Life

February 6, 2020 Leave a Comment

Nine in 10 Americans are satisfied with the way things are going in their personal life, a new high in Gallup’s four-decade trend. The latest figure bests the previous high of 88% recorded in 2003. Gallup reports:

These results are from Gallup’s Mood of the Nation poll, conducted Jan. 2-15, which also recorded a 20-year high in Americans’ confidence in the U.S. economy. The percentage of Americans who report being satisfied with their personal life is similar to the 86% who said in December that they were very or fairly happy — though the happiness figure, while high, is on the low end of what Gallup has measured historically for that question.
Despite some variation, solid majorities of Americans have reported being satisfied with their personal life over the past few decades, with an average of 83% satisfied since 1979. The historical low of 73% was recorded in July 1979, as the effects of that year’s oil crisis took a toll on U.S. motorists. During that poll’s fielding dates, then-President Jimmy Carter delivered his “malaise speech,” which was interpreted by some as placing blame on Americans themselves for the rough economic spot the country was in.
A 2019 survey on 10 aspects of Americans’ lives found that they are most satisfied with their family life, their education and the way they spend their leisure time — and least satisfied with the amount of leisure time they have, their household income and their job.

Coronavirus is Now a Public Health Emergency in the United States; Avoid Traveling to China

January 31, 2020 Leave a Comment

The Donald Trump administration declared the coronavirus outbreak to be a public health emergency in the United States on Friday, setting quarantines of Americans who have recently been to certain parts of China. USA Today reports:

Centers for Disease Control and Prevention officials said it was the first quarantine order issued by the federal government in over 50 years. Marty Cetron, director of CDC’s Division of Global Migration and Quarantine, said the last time a quarantine was used was in the 1960s for smallpox.
U.S. citizens who have been in China’s Hubei province during the past 14 days and are returning to the U.S. States will undergo health screenings and be monitored during mandatory quarantines of up to 14 days, officials said.
Alex Azar, secretary of Health and Human Services, also announced a temporary suspension of entry into the United States of foreign nationals who pose a risk for the transmission of the coronavirus.

New Safety Gizmos Are Making Car Insurance More Expensive

January 30, 2020 Leave a Comment

American car insurance rates are going up up up. In the past decade, they climbed 29.6 percent, to an average of $1,548 in 2019 from $1,194 in 2011. Wired reports:

The surge, detailed in a new report from insurance shopping site The Zebra, outpaced both inflation (by far) and the increase in average car prices (more narrowly). And it came even as the rate of crashes has fallen year over year…
It turns out that new features designed to keep vehicles in their lanes and out of trouble are contributing to rising insurance rates.
That’s because the sensors that power those systems make cars much more expensive to fix when they do crash. Dent a steel bumper, and a few hammer blows gets you back on the road. Smash one on a new car, and it could mean replacing a radar, a camera, and ultrasonic sensors, then calibrating them so they work properly. Replacing a cracked windshield now comes with the extra cost of having someone readjust any cameras that look through the glass.
While some studies have shown the effectiveness of emergency braking, insurance companies haven’t yet seen enough evidence to justify a break in rates for most of these features. That’s not to say lane keeping, parking assist, and the rest don’t work. They’re all relatively new, and the actuaries aren’t yet confident that their benefits outweigh the extra costs they incur to repair. Complicating the picture is the fact that each automaker offers its own version of each feature, and that drivers may not keep the systems engaged.

American Households Waste Nearly A Third Of Their Food, Study Finds

January 27, 2020 Leave a Comment

According to research led by agricultural economics professor Edward Jaenicke of Penn State University, the average American household wastes nearly a third of its food. The value of that waste is estimated at $240 billion annually. When divided among the 128.6 million American households, that’s an average of $1,866 being wasted per household on a yearly basis. Study Finds reports:

Jaenicke says all that wasted food has far-reaching consequences, and negatively impacts overall American health, food marketing, climate change, and food security.
“Our findings are consistent with previous studies, which have shown that 30% to 40% of the total food supply in the United States goes uneaten — and that means that resources used to produce the uneaten food, including land, energy, water and labor, are wasted as well,” Jaenicke says in a university release. “But this study is the first to identify and analyze the level of food waste for individual households, which has been nearly impossible to estimate because comprehensive, current data on uneaten food at the household level do not exist.”

Over 40% of Americans Don’t Have $1,000 for an Emergency!

January 22, 2020 Leave a Comment

Many of us would be in trouble if we had to foot the bill for an unplanned expense. Bankrate’s January Financial Security Index survey reveals that just four in 10 U.S. adults (41 percent) would cover the cost of a $1,000 car repair or emergency room visit using savings. Bankrate reports:

The findings echo what previous Bankrate studies and others — including the Federal Reserve and the Pew Charitable Trusts — have found about Americans’ lack of rainy-day savings.
The higher your household income, the more likely you would be to use savings to pay for unanticipated costs. That’s true for nearly six in 10 (59 percent) households earning $75,000 or more annually.
Men (45 percent) were more likely than women (38 percent) to say they would draw from savings when faced with the unexpected. And when their backs are against the wall, just 36 percent of younger millennials would turn to emergency funds to pay $1,000 (compared with 41 to 44 percent of older folks who would say the same).

2,153 Billionaires Are Richer Than 4.6 Billion People

January 20, 2020 Leave a Comment

The world’s richest 2,153 people controlled more money than the poorest 4.6 billion combined in 2019, while unpaid or underpaid work by women and girls adds three times more to the global economy each year than the technology industry, Oxfam said on Monday. Reuters reports:

The Nairobi-headquartered charity said in a report released ahead of the annual World Economic Forum of political and business leaders in Davos, Switzerland, that women around the world work 12.5 billion hours combined each day without pay or recognition.
In its “Time to Care” report, Oxfam said it estimated that unpaid care work by women added at least $10.8 trillion a year in value to the world economy – three times more than the tech industry.

Google Parent Company Alphabet Hits $1 Trillion Market Cap

January 17, 2020 Leave a Comment

Google parent-company Alphabet has hit $1 trillion in market capitalization, making it the fourth U.S. company to hit the milestone. CNBC reports:

Apple was the first to hit the market cap milestone in 2018. Then, Microsoft and Amazon followed. Apple and Microsoft are still valued at more than a trillion dollars while Amazon has since fallen below the mark.
Analysts are bullish on the company’s newly appointed CEO, Sundar Pichai. In a surprise announcement in December 2019, Alphabet founder Larry Page announced plans to step down as CEO, along with co-founder and president Sergey Brin.

Pichai had already been the CEO of Google, which includes all the company’s core businesses — including search, advertising, YouTube and Android — and generates substantially all its revenue and profits. But he reported to Page, who also oversaw other businesses making long-term bets on experimental technology like self-driving cars and package delivery drones. Now, he’s in charge of the whole conglomerate, although Page and Brin still have control over most of the company’s voting shares, giving them significant influence in major decisions.

Comcast Settles Lying Allegations, Will Issue Refunds and Cancel Debts

January 16, 2020 Leave a Comment

Comcast has agreed to issue refunds to 15,600 customers and cancel the debts of another 16,000 people to settle allegations that the cable company lied to customers in order to hide the true cost of service. Comcast will have to pay $1.3 million in refunds. Ars Technica reports:

Comcast will have to pay $1.3 million in refunds. The settlement with Minnesota Attorney General Keith Ellison, announced yesterday, resolves a lawsuit filed by the state against Comcast in December 2018.

The attorney general’s lawsuit alleged that Comcast “charged Minnesota consumers more than it promised it would for their cable services, including undisclosed ‘fees’ that the company used to bolster its profits, and that it charged for services and equipment that customers did not request,” the settlement announcement said. Comcast also “promised [customers] prepaid gift cards as an inducement to enter into multi-year contracts, then failed to provide the cards,” Minnesota alleged.
Refunds to the 15,600 customers will total $1.14 million. Comcast must also pay another $160,000 to the state attorney general’s office, which can use any or all of that amount to provide additional refunds. That brings the total amount Comcast will pay to $1.3 million.

All U.S. Metros Enjoyed Income Gains For First Time in 26 Years

January 15, 2020 Leave a Comment

Americans in every U.S. metropolitan area experienced economic prosperity in 2018, according to a recent report from the Bureau of Economic Analysis. For the first time in 26 years, no metro area saw per-capita incomes fall that year — the latest available data — and it was only the fourth time since 1970 that every U.S. urban region experienced prosperity. Bloomberg reports:

Americans in fewer than 6% of metropolitan areas have experienced uninterpreted gains in personal income since 1970. In contrast, as the country began to recover from the Great Recession in 2009, residents of 84% of metro areas saw incomes decline. A large number of areas saw significant decreases in 2013 and to a lesser extent in 2016.
Metros that haven’t experienced per-capita income drops in recent years include Washington D.C. and Pittsburgh. The nation’s capital is buffered from sector-based recessions by a federal government that pulls tax revenue from a variety of sources and geographies. The Pennsylvania city, meanwhile, has emerged as a health care, education, and technology hub even as its population declines.

Dow Breaks Above 29,000 for the First Time Ever

January 10, 2020 Leave a Comment

Stocks rose to record highs on Friday despite weaker-than-expected jobs data as Wall Street concluded a volatile week chalk full of geopolitical concerns. The Dow Jones Industrial Average traded 48 points higher, or 0.2% to break above 29,000 for the first time ever. CNBC reports:

The U.S. economy added 145,000 jobs in December. Economists polled by Dow Jones expect the U.S. economy to have added 160,000 jobs in December.
Wages also disappointed, growing by just 2.9% on a year-over-year basis. Economists had forecast a gain of 3.1%. December was also the first month since July 2018 that wages grew by less than 3% from the year before.
“The December jobs report was a little softer than expected but not so much so as to stoke big worries about the US consumer and the health of the overall economy,” said Alec Young, director of global markets research at FTSE Russell. “Although both readings were slightly below expectations and the recent trend, neither is overly alarming by itself.”

IRS Reforms Free File Program, Drops Agreement Not to Compete With TurboTax

December 31, 2019 Leave a Comment

Finding free online tax filing should be easier this year for millions of Americans. ProPublica reports:

The IRS announced significant changes Monday to its deal with the tax prep software industry. Now companies are barred from hiding their free products from search engines such as Google, and a years-old prohibition on the IRS creating its own online filing system has been scrapped.
The addendum to the deal, known as Free File, comes after ProPublica’s reporting this year on how the industry, led by TurboTax maker Intuit, has long misled taxpayers who are eligible to file for free into paying.

Under the nearly two-decade-old Free File deal, the industry agreed to make free versions of tax filing software available to lower- and middle-income Americans. In exchange, the IRS promised not to compete with the industry by creating its own online filing system. Many developed countries have such systems, allowing most citizens to file their taxes for free. The prohibition on the IRS creating its own system was the focus of years of lobbying by Intuit. The industry has seen such a system as an existential threat. Now, with the changes to the deal, the prohibition has been dropped.

The addendum also expressly bars the companies from “engaging in any practice” that would exclude their Free File offerings “from an organic internet search.” ProPublica reported in April that Intuit and H&R Block had added code to their Free File pages that hid them from Google and other search engines, diverting many users to the companies’ paid products.
“The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option,” IRS Commissioner Chuck Rettig said in a statement. The agency hopes the changes will make the free option more accessible for taxpayers in the 2020 filing season, he said.

Wages for Typical Workers Are Rising at Their Fastest Rate in a Decade

December 27, 2019 Leave a Comment

Wages for nonsupervisory employees — who make up 82% of the workforce — are rising at the fastest rate in more than a decade, The Wall Street Journal reports.

Workers at the bottom of the pay scale have been feeling positive effects on their wages at the end of 2019 — especially when compared to those at the top.

Pay rates the bottom 25% of wage earners rose 4.5% in November from a year earlier, while wages for the top 25% of earners rose only 2.9%, per data from the Federal Reserve Bank of Atlanta.

Americans Are Retiring to Vietnam, for Cheap Healthcare And a Decent Living Standard

December 26, 2019 Leave a Comment

Rapid growth in Vietnam and its Southeast Asian neighbors has created a situation that would have been unthinkable in the past: Aging American boomers are living a lifestyle reminiscent of Florida, Nevada and Arizona, but in Vietnam. Monthly expenses here rarely exceed $2,000. Los Angeles Times reports:

Vietnam has relaxed visa rules to lure American retirees like Rockhold, along with their savings. Geopolitics are a factor; Vietnam has seen spillover benefits from the economic boom in China but also has an ambivalent relationship with its far larger and more powerful neighbor, with which it fought a brief war in 1979. Expatriates tend to consider Vietnam more hospitable than China; Ho Chi Minh City, formerly Saigon, retains a cosmopolitan character.
The government won’t say precisely how many American retirees live in Vietnam. Interviews with about a dozen such retirees suggest that some are here on one-year tourist visas; others are here just for a season or two; and still others have qualified for long residence by marrying Vietnamese citizens, as Rockhold did.

Millionaires Support a Wealth Tax — as Long as They Aren’t Getting Taxed

December 25, 2019 Leave a Comment

A majority of millionaires support a wealth tax on those worth $50 million or more, but their support declines for a tax on those worth $10 million, according to a new poll. CNBC reports:

Fifty-nine percent of millionaires said they would support a new federal tax on wealth over $50 million, according to the Q4 CNBC Millionaire Survey. Democratic presidential candidate Elizabeth Warren’s tax plan includes a wealth tax of 2% on wealth over $50 million and 6% over $1 billion.
Forty-eight percent opposed a wealth tax on those worth over $10 million.
Attitudes toward the wealth tax are also strongly dependent on political party rather than wealth levels. Fully 88% of Democratic millionaires support a tax on wealth over $50 million, compared with just a third of Republican millionaires.