News from the Control Tower: Our weekly curated list of news stories affecting you and your finances.
I’ve been busy enjoying some vacation time, but am now back with my weekly news summary.
I’ve included a number of articles on our ‘hot labor summer’. The US is experiencing unprecedented levels of labor activity and strikes. The writers' and actors' strikes get a lot of news play, but also joining in are hotel workers, truckers, dockworkers, pilots and more: all are angling for better pay and/or benefits.
Another factor having an economic impact: the housing market. Normally, one would expect the steep rise in interest rates to sink home prices. That hasn’t played out, however. So many people have locked in low rates on their home mortgages that no one wants to sell. That’s keeping supply low and actually driving up prices. We can see a real contrast with the housing market in England, where homeowners can’t lock in 30-years rates. They get a variable rate or lock in a fixed rate for either a 2-year or 5-year period. The interest rate hikes in England are having a much bigger impact on household budgets.
With such strong labor and housing markets, what’s going to happen with this recession that prognosticators continue to insist is on the horizon? Many are now conceding that a soft landing looks more likely.
Finally, switching gears from the economy to the stock market, we’re now in a bull market, largely driven by the 10 biggest companies in the US. What about the rest of the companies? We are starting to see some breadth in the stock market recovery as the others start to catch-up – a generally healthy sign. The linked New York Times article gives a nice overview.
Hope you’re all enjoying your summers. –Amanda Vaught
The labor movement is emboldened and ready to test its clout.
“More than 650,000 American workers are threatening to go on strike this summer — or have already done so — in an avalanche of union activity not seen in the US in decades. “
The Bank of England’s campaign to curb inflation is pushing up monthly payments for millions of homeowners.
Rising interest rates were widely expected to put the U.S. economy in reverse. Now things are looking rosier, but don’t pop the Champagne corks yet.