Even though we had to work, this past Monday was yet another Monday without economic news. On Tuesday, the National Association of Realtors released its September Existing Home Sales report, which increased 2.4 percent over August. Year-over-year growth is down 1.7 percent. September home prices were down 4.0 percent for the month to a median $209,700. Condo sales led gains.
Every week the housing market changes as much as Bridget Jones’ face, but the good news for buyers is that prices may be dropping and interest rates are still at historic lows. For those who’ve sat on the housing sidelines, now may be the time to consider market entry.
The Bureau of Labor Statistics released its September Consumer Price Index (CPI), which saw a modest rise of 0.1 percent after August’s 0.2 percent drop. As you may have noticed at the pump, gas prices fell 1.0 percent, after August’s 4.1 percent fall. Food prices increased 0.3 percent, after August’s 0.2 percent increase. Year-over-year CPI is up 1.7 percent and, as the Social Security Administration announced Wednesday, will be the 2015 Social Security increase.
U.S. inflation remains contained, but that doesn’t mean consumers shouldn’t adjust their budgets accordingly. Increased gasoline inventories have pushed energy prices down, thanks to North Dakota. Fracking isn’t just an imprecation on Battlestar Galactica. All signs suggest, including T. Boone Pickens’ bank account, this should continue. Food, however, has had a tougher go of it and suggests consumers should decrease other spending categories to offset expenses in their food category.
Price increases on Arabica coffee, cocoa (chocolate’s antecedent) and cattle are reasons why we’re motivated to help the least interested in economics be #moneyconscious. Arabica coffee growers in Brazil and cattle ranchers in the U.S. are experiencing tough growing seasons due to local droughts. These droughts have caused double-digit price increases in their corresponding commodities. Cocoa’s price increase is due to an increasing middle class in developing nations with the same penchant for chocolate as yours truly. People the world over love chocolate. Being aware of these increases and why they exist makes it easier, though less fun, to budget. What’s even less fun is being more surprised by your expenses than the fact that Two & a Half Men is still on TV.
On Thursday, the Federal Housing Finance Agency (FHFA) released its August House Price Index report, which lags Tuesday’s Existing Home Sales report both in days and months. The House Price Index increased by 0.5 percent, after July’s 0.2 percent increase and suggests housing market volatility, just like stock market volatility, will be around for a while. Thursday’s last report worth noting was the Conference Board’s September Leading Indicators Index, which showed a 0.8 percent increase over August’s unchanged 0.2 percent gain from July. This index proffers to predict the performance of leading economic pointers for the next three to six months. If it’s even half as accurate as Nostradamus, we may soon see significant economic improvements.
Friday’s New Home Sales report for September from the Commerce Department showed that new home sales rose 0.2 percent over August’s downwardly revised 10.5 percent. According to Freddie Mac, the average 30-year fixed rate loan fell to 3.92 percent, the lowest since June 2013. The 15-year fixed fell to 3.08 percent. The latest housing data may suggest that new homes won’t haunt buyers.
While we’re rapidly approaching the Fed’s unwinding of QE3, the stock market has been significantly volatile. The Chicago Board of Options Exchanges (CBOE) Volatility Index (VIX), which measures market volatility, is up almost 100 percent since August. No one really knows how QE3’s end will affect the stock market or the economy and this is why it remains one of our top three concerns. Our other two remaining concerns are jobs and wages.
Deflationary pressure in Europe has grabbed our attention as a possible fourth concern. While European deflation isn’t an eminent threat to the U.S., it’s more threatening to you than Ebola.
These 3.25 concerns are the reason we suggest controlling spending, increasing savings and investing and holding more cash than usual. These recommendations will likely not change until after next month’s mid-term election and maybe not until after New Years.
A lot of what we discuss on this site is designed to help readers grow and protect their money. One topic we only occasionally discuss is the threat of scammers. We’ve discussed data breaches, such as those of Target and Home Depot. Scamming is another concern that can creep up on anyone not paying attention. Thankfully, The Lazy Man, put together this synopsis of seven scammer persuasion tools to help readers not lose their money to a jerk.
If you’ve already been a victim of a money scam or suffer from bad credit of your own doing, The Savvy Scot created this list of four ways to improve your credit score. If you’re credit score is bad, don’t accept it for what it is. Take the necessary steps to fix it, but as Young Finance advises, you’re not your credit score.
That’s what we think you must know this week to be #MoneyConscious. Come back every Saturday to get the low down on what you must know to sound smarter than your boss on Monday.