Credit Sesame’s personal finance news roundup January 11, 2025. Stories, news, politics, and events impacting personal finance during the past week.
Job growth strong in December 2024
The US economy added 256,000 jobs in December. This completed the fourth year in a row in which employment grew every month. In total, the economy added 2.2 million jobs in 2024. December’s job growth exceed the monthly average for 2024 of 186,000. Healthcare and retail were leading areas of job growth in December. See details at BLS.gov.
Revolving credit declined in November 2024
Revolving credit owed declined at a seasonally adjusted annual pace of 12% in November. November is usually one of the heaviest months for the use of revolving credit. The way seasonal adjustment works, the actual amount of revolving credit outstanding increased during November, but by much less than would typically be expected at the start of the holiday shopping season. The vast majority of revolving credit is credit card balances. Consumers didn’t completely turn their backs on using credit during November, as nonrevolving credit rose at a seasonally adjusted annual rate of 2.0%. See details at FederalReserve.gov.
Bankers sue government to stop overdraft fee cap
The American Bankers Association (ABA) is suing the Consumer Financial Protection Bureau (CFPB) to block the CFPB’s recently announced limit on overdraft fees. The fee cap was issued on the grounds that overdraft fees are a form of finance charges for credit issued by banks to consumers. The ABA argues that overdrafts are not credit and should not be treated as finance charges. The lawsuit also argues that the CFPB overstepped its legal authority in issuing the fee cap. See the news release at ABA.com.
CFPB makes final push to sideline medical debt
The CFPB has announced a new rule that would exclude information about medical debt from credit reports. This would potentially affect 15 million consumers with $49 billion in unpaid medical debt. However, the measure wouldn’t absolve consumers from that debt. They would still be legally obligated to pay it, but it would not appear on their credit reports. Critics of the move say it could restrict lending because it would make credit information less reliable. In any case, it’s questionable whether the measure will survive when the new presidential administration comes in. See report at Reuters.com.
Mortgage rates continue to trend upward
30-year mortgage rates continued to surge toward 7%, rising by two basis points last week to 6.93%. This was the fourth consecutive week mortgage rates rose, with 30-year rates rising by 33 basis points. Overall, 30-year rates are up by 85 basis points since bottoming out at the end of September 2024 and are 27 basis points higher than a year ago. 15-year rates also rose for a fourth straight week, increasing by one basis point to reach 6.14%. See mortgage rate detail at FreddieMac.com.
Mortgage credit standards loosened in December 2024
Mortgage credit availability rose by 0.7% in December, reaching 96.6 on the Mortgage Credit Availability Index (MCAI), per the Mortgage Bankers Association. A higher index reflects looser credit standards. The Conventional MCAI increased by 1.3%, driven by more adjustable-rate mortgage (ARM) and cash-out refinance options for borrowers with strong credit, while the Government MCAI remained unchanged. The Jumbo MCAI climbed 2.3% to its highest level since August 2024, offsetting a 0.7% drop in the Conforming MCAI. Joel Kan, MBA’s Deputy Chief Economist, attributed the rebound in conventional credit to these expanded offerings for creditworthy borrowers. See news release at MBA.org.
Bond prices plunge as interest rates rise
Yields on bonds around the globe have been falling sharply as inflation concerns have mounted. The rate on 10-year US bonds rose to 4.7%, its highest since April 2024. Bonds are traditionally a haven in uncertain times, but not when the uncertainty involves a return of inflation. Experts say investors are selling bonds out of concern that plans for new trade tariffs and tax cuts could lead to higher inflation and an expanding deficit. Both would drive down the value of US bonds. This would affect consumers because loan rates, such as on mortgages, often respond more closely to moves in the bond market than to Fed rate changes. See article at Reuters.com.
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