Personal finance weekly news roundup February 8, 2025

Credit Sesame’s personal finance news roundup February 8, 2025. Stories, news, politics and events impacting personal finance during the past week.

2024 personal income grew faster than inflation

The Bureau of Economic Analysis found that personal income grew by 2.4% in 2024 after adjusting for inflation. However, household spending grew even faster, at 3.1%. The Personal Consumption Expenditures (PCE) price index rose 2.6% for the year. The PCE price index is the preferred inflation measure the Federal Reserve uses in making interest rate decisions. See report at BEA.gov.

Employment growth continues in January 2025

The US economy added 143,000 new jobs in January. This extends the streak of monthly job growth the economy has been on for over four years. Still, January 2025’s job growth was slightly below last year’s monthly average of 166,000. In fact, 2024’s job market was even stronger than previously reported. In the new employment report, November and December’s job growth numbers were revised upward by a combined total of 100,000. The biggest employment gain in January was in healthcare, with 44,000 new jobs added. See employment report at BLS.gov.

Head of Consumer Financial Protection Bureau fired

The incoming Trump Administration has fired Consumer Financial Protection Bureau (CFPB) director Rohit Chopra. Under Chopra, the CFPB actively advocated for limits on the cost of financial products and punished financial firms that broke the law. Critics felt that Chopra’s emphasis on consumer protection and strict enforcement placed too great a burden on the financial industry. See the article at NYTimes.com.

Senators propose bill to cap credit card fees at 10%

Senators Bernie Sanders and Josh Hawley have proposed a bill limiting credit card fees to 10%. The move takes up a campaign promise by Donald Trump and has supporters on both sides of the aisle. Critics say that such a low limit would severely restrict credit accessibility. The result could be that very few Americans could qualify for a credit card and a severe reduction in consumer spending. See article on Yahoo.com.

US job openings declined in 2024

The number of jobs open in the US declined in December and over the past year. The Bureau of Labor Statistics reported 7.6 million job openings as of the last day of December. That’s down by 556,000 openings from the previous month and by 1,289,000 jobs from a year earlier. The numbers are adjusted to neutralize the impact of expected seasonal hiring trends. In recent years, an unusually high number of job openings relative to the number of job seekers has contributed to inflation. Fewer job openings could ease this inflationary effect, though it makes for a less favorable market for job seekers. See report at BLS.gov.

Banks raise credit standards in Q4 2024

The Federal Reserve’s Senior Loan Officer Opinion Survey showed that banks raised their approval standards for credit cards in the final quarter of 2024. At the same time, consumer demand for credit cards weakened. Demand for mortgages and consumer loans, other than auto loans, also weakened. Lending standards for products other than credit cards were generally unchanged. See SLOOS report at FederalReserve.gov.

Mortgage delinquency rates rose in Q4 2024

Late payments on residential mortgages increased in the final quarter of 2024. The delinquency rate for one-to-four-unit properties rose by 6 basis points during the quarter to 3.98%. This is 10 basis points higher than it was a year earlier. A closer look shows the problem is much greater for some types of mortgages. The delinquency rate on conventional mortgages is near its all-time low, at 2.62%. In contrast, the delinquency rate on VA mortgages is 4.70%, and FHA mortgages is 11.03%. See news release at MBA.org.

Mortgage rates drop for third consecutive week

30-year mortgage rates dropped by six basis points last week. That brought them to 6.89%. This was their third consecutive weekly decline, though they’ve only dropped by a total of 15 basis points over that span. Previously, they rose for five straight weeks for a total of 44 basis points. Overall, mortgage rates are still 81 basis points higher than they were at the end of September, so the trend over the past few months has been decidedly upward. 15-year mortgage rates fell by seven basis points last week. Like 30-year rates, 15-year rates have also fallen for three weeks in a row. However, 15-year rates have made more progress during that span, falling by a total of 22 basis points. See mortgage data at FreddieMac.com.