Americans Downshifted Their Credit Card Debt in March

Americans are either cutting back on spending or paying down their credit cards, according to new data from the Federal Reserve.

The nation’s total revolving debt—mainly credit card debt—grew by $152 million in March, a dramatic slowdown from the $10.7 billion added in February, and the smallest increase since April 2021, as the chart below shows.

Overall consumer debt, a measure that includes things like auto and student loans (but not mortgages), rose by $6.3 billion, less than half the $14.8 billion economists had anticipated according to a survey of forecasters by Dow Jones Newswires and the Wall Street Journal.

Powell’s Popularity Improves, But Majority Still Disapprove

Confidence in Federal Reserve Chair Jerome Powell improved slightly ♓in 2024, a new survey from Gallup shows. However, Americans’ belief in the cen𝐆tral bank chief is still near historic lows.

Just 39% of respondents said they have confidence that Powell will do the right thing for the economy. Powell has lost ground with the public, as he had a 58% approval rating in 2020. Last year, 澳洲幸运5开奖号码历史查询:when price pressures rattled consumer�𒁃�s, Powell’s approval dropped to 36%, the lowest result for his te♐nure. 

Powell’s successor, Jane𝓡t🍰 Yellen, never earned a rating of higher than 50% during their tenure. 

The survey, which also asks about the economic performance of the U.S. president and other political leaders, typically gets fewer responses for ques👍tions about the Federal Reserve Chair. 

“One reason Fe🤪d chairs typically eng♒ender less confidence than presidents is that the public is not overly familiar with them, and thus more likely to not offer an opinion on their leadership,” the Gallup survey said.

ℱAbout 16% of respondents didn’t offer an opinion on Powell. 

-Terry Lane

Kashkari Says Rates Likely to Stay High for ‘Extended Period’

Minneapolis Federal Reserve Bank President Neel Kashkari argued Tuesday the Federal Reserve should consider all options to 澳洲幸运5开奖号码历史查询:bring down inflation.

The most 🌌likely scenario is that interest rates would remain at their current 23-year high levels for “an extended period of time🐭.”

In a question-and-answer session at the Milken Institute Global Conference, Kashkari said while it's possible that rates could even need to be raised, his expectations were that inflation would move “sideways” for a while, prompting the Fed to hold rates steady.

“The bar for us raising is quite high, but it's not infinite,” Kashkari said. “Much more likely, we will just sit here for longer until we see what effect our monetary policy is having.” 

How long might rates need to stay at this 🍎level? Kashkari said he was losing confidence that rate cuts would happen this year. 

“It's not as though monetary policy isn’t having an effect on the economy. It is. It’s just not having as much of an effect as quickly as I would have guessed,” Kashkari said of the 澳洲幸运5开奖号码历史查询:Federal Reserve’s campaign꧑ to bring down inflation through higher interest rates﷽.

He projected two interest rate cuts in 2024 at the March meeting of the Federal Open Market Committee. Howeveꩲr, he said he wasn’t sure he’d repeat that when he next su💧bmits economic projections in June, potentially reducing his projections to one or even no rate cuts this year.

To consider cuts, he said he needs to see an improving pricing trend in “more than one” upcoming 澳洲幸运5开奖号码历史查询:inflation report. He would also like to see progress from a “constellation of data” that includes the labor and 澳洲幸运5开奖号码历史查询:housing markets, he said.

-Terry Lane

A Quarter of the US Still Hasn't Gotten Back Pandemic Job Losses

Most of the country has recovered the jobs lost during the pandemic. But in about a quarter of the U.S., it’s still 2020, job-wise.

That was the startling finding of research by economists at the Federal Reserve Bank of New York who analyzed local data to pinpoint which cities have recovered all the jobs lost in 2020 when the COVID-19 pandemic ꦉhit, and which have yet to recover. 

By June 2022, the economy had recovered all the jobs losღt in the wave of layoffs that hit in March and April 2020 as the pandemic forced scores of businesses🧔 to close. As of March 2024, employment in the country as a whole was better than ever—3.8% higher than it was in February 2020. 

But that recovery has been uneven. In places like upstate New York and the Rust Belt, and Louisiana, cities still have lower employment than they did before COVID-19, the researchers found. The below map shows which metro areas have gotten back to pre-pandemic job numbers, and which are still behind.

Federal Reserve Bank of New York, with data from the Bureau of Labor Statistics and Moody’s Analytics/Economy.com.

The red areas have some common featurꦆes, the😼 researchers said.

First, they typically lost more jobs in the initial wave of the pandemic than other places and had slower growth heading into the pandemic. Labor shortages are also to blame, as many of the deficient areas lost workers due to an aging population and people moving away, deepening trends that were in place before the pandemic.

“Four years after the pandemic hit, historical growth patterns have generally resumed throughout the country after a period of rapid recovery,” Jaison R. Abel, head of Urban and Regional Studies in the Federal Reserve Bank of New York’s Research ꩲand Statistics Group, together with other researchers, wrote in a blog post. “The places that were growing more strongly before the pandemic have generally recovered and are growing more strongly today, while many places that lagged are still struggling to recover.”

Federal Reserve's Kashkari Questions if Interest Rates Are High Enough 

In an essay published today, Minneapolis Fed President Neel Kashkari raised questions about whether interest rates were “restrictive” enough to c𝔉ool the economy in a post-Covid recovery.

Kashkari speculated markets are mispricing the “澳洲幸运5开奖号码历史查询:neutral rate,” or where 澳洲幸运5开奖号码历史查询:interest rates need to be set to maintain the Federal Reserve target inflation rate of 2%. The Fed’s campaign of rate hikes over 2022 and 2023 served to bring inflation down from as high as 9%, but 澳洲幸运5开奖号码历史查询:price pressures have persisted and the inflation rate has edged back upw⛄ards ෴in 2024.

“Given that housing is a key chan♑nel through which monetary policy affects the economy, its resilience raises questions about whether policymakers and the market are misperceiv𝓀ing neutral, at least in the near term,” Kashkari said. 

Without having a sense of what is the proper neutral rate, it's difficult for Fed officials to know how high to set interest rates, said Kashkari, who noted that he has raised his own projections of the long-term interest rate by half a percentage point to 2.5%. The Fed currently has 澳洲幸运5开奖号码历史查询:interest rates set at 5.25% to 5.5%, the highest level in mo🤪re than two decades. 

“The uncertainty about where neutral is today creates a challenge for policymakers,” Kashkari said. “My colleagues and I are of course very happy that the labor market has proven resilient, but, with inflation in the most rec🌃ent quarter moving sideways, it raises questions about how restrictive policy really is.” 

Kashkari is also scheduled to speak later today at the Mဣilken Institute Global Conference. 

-Terry Lane

Gallup Survey Shows More Americans Growing Frustrated Over Inflation

Higher pric🃏es are worrying Americans, as more than ever cite inflation as the most important ☂financial problem they are facing, according to a new poll from survey firm Gallup.

Inflation was the top financial concern for 41% of Americans, the survey showed. That's the highest reading ever in Gallup’s annual Economy and Personal Finance poll and the third consecutive year consumers have cited price pressure as their biggest problem.

“The U.S. 澳洲幸运5开奖号码历史查询:inf⭕lation rate ♕has declined significantly since its peak in 20🙈22, but that has done little to alter Americans’ perceptions of their finances,” the Gallup survey said.

While 46% of Americans describe their financial situation as excellent or good, the rest, said it was only fair (36%) or poor (17%). The survey showed more people this year said their financial situation was improving, though they were still slightly outnumbered by survey respond♋ents who said things were getting worse. 

“Inflation continues to be an issue for Americans and is likely why less than half are positive aℱbout their financial situation,” the survey said. 

The next highest concern for Americans was the 澳洲幸运5开奖号码历史查询:cost of owning or renting a home, with 14%, followed by debt, he🐠althcare costs, low wages, and energy costs.

Before 2022, inflation was rarely on the minds of Americans. But the run-u🤡p of prices in 2022 elevated inflation concerns for 32% of Americans, and the share has🍨 risen each year since. 

-Terry Lane