Child Tax Credit Expansion൲ Could Go For a Vote Next Week

Despite a bipartisan vote of approval in committee last week, there's still no concrete path forward for the expansion of the child tax credit.

A bipartisan coalition of lawmakers has lined up behind the expansion, which is a comprise between Democrats and Republicans after the pandemic-era rules for the credit expired last year. The compromise would help lift 500,000 children out of poverty.

One of the leaders of the tax credit compromise, Democratic senator Ron Wyden of Oregon, has said he hopes the bill will pass by the end of the month. Reportedly, Speaker Mike Johnson is facing some pushback on the bill from a subset of his fellow Republicans.

"Let's not count it out yet but not count it in either," said Libby Cantrill, PIMCO's head of U.S. public policy on Bloomberg Wednesday afternoon.

Dip in Rents Could Put a Dent in Inflation

Rents are going down and they could take inflation 🐎with it, acc🐓ording to an analysis by Morgan Stanley Wednesday.

The rent data from the Bureau of Labor Statistics this week showed a noteworthy 4.7% year-over-year drop in rents during the fourth quarter. It’s the first time the index has dropped since 2010 and it comes after double-digit-percentage climbs in 2021 and 2022. 

Housing costs are a component of both the PCE and the Consumer Price Index (CPI) inflation measurement. 澳洲幸运5官方开奖结果体彩网:Inflation has cooled from its highs in 2022, but the latest CPI report showed 澳洲幸运5官方开奖结果体彩网:in🐼flation in💖 December ticked higher to 3.4%, partially ♕because housing payments remain♛ed high.

According to a note from Morgan Stanley economists led by Diego Anzoategui, the fall in rent data is likely a precu🍌rsor to lower overall inflation levels.

“Just as an initial jobless 🀅claim today is a continuing claim tomorrow, a new rental lease today is an existing lease tomorrow, which naturally implies that new-lease data can provide useful signals about future housing CPI/PCE prints,” the note said. 

Morgan Stanley is projecting rent inflation to further decrease in the second half of the year, though it’s not expected to fall below pre-Covid levels due to a 澳洲幸运5官方开奖结果体彩网:robust jobs market. 

“And the historical relationship is clear, low unemployment means more shelter inflation,” the note said. 

Tech Layoffs Aren’t Spreading To Other Industries, Indeed Says

To look a💫t the headlines about the tech industry, you might think the job market and the economy are headed down the tubes—but th🎃at impression is misleading, according to data from job hunting site Indeed. 

The job market in the tech industry is indeed taking a big hit. Big-name companies including Amazon and eBay have announced layoffs recently, not to mention those at smaller firms including video game company Unity. Since the year began, 146 companies have laid off 24,365 people this year, according to trueup.io, a company that tracks tech layoff announcements. And 2024 is just getting started.

However, if you’re not in the tech industry, chances are your job is relatively safe, according to Nick Bunker, economic research director at Indeed’s hiring lab. That’s similar to the trend last year, when high-profile layoffs at tech companies didn’t dent the overall labor market, which had near-record 澳洲幸运5官方开奖结果体彩网:low unemployment, according to government statistics.

“Last year’s batch of layoffs did not represent what was happening in the rest of the U.S. labor market; the same is true now,” Bunker said in a commentary Wednesday. “Both waves of tech layoffs appear to be mostly about rebalancing workforces to adjust to the current economic outlook after a burst of hiring in 2021.”

More than a broader labor trend, the latest layoffs may be a symptom of tech companies shifting resources to the latest buzzword: 澳洲幸运5官方开奖结果体彩网:generative AI.

Still, there’s no doubt it’s pretty dismal for job hunters in the tech space, at least compared to last year, according to Indeed’s data. Job posts for software d𓃲evelopment jobs were down 44.5% compared to a year ago, with IT operations and helpdesk down 28.7% and information design and documentation down 37.7%, the company said. 

Manufacturing, Services PMI Surge Ahead in First 2024 Reading

A snapshot of the U.S. economy showed that it was off to a strong start to 2024, with trends improving in both the manufacturing and﷽ services sectors.

The S&P 500 flash 澳洲幸运5官方开奖结果体彩网:Purchasing Managers’ Index (PMI) for January came in better than expected for both sectors, S&P Global Market Intelligence reported today. The services sector PMI came in at 52.9 to hit its highest level in seven months, surging ahead of December’s reading of 51.4 and defying analyst forecasts of a dip to 51.2. The service sector accounts for about four-🐷fifths of 🌸the U.S. gross domestic product (GDP).

The manufacturing PMI shot up to 50.3, rising for the first tim꧟e in nine months, and running past analyst estimates of a 47.2 reading and last month’s result of 47.9. Goods producers registered their first rise in sales since October and the fastest jump since May 2022, the report showed. 

The PMI data is the latest in a string of recent economic readings that came in better than expected, raising worries that the hot economy will keep the labor market tight and wages high, potentially 澳洲幸运5官方开奖结果体彩网:exteꦦnding the fight against inflation and pushing back anticipated interest rate cuts. The latest 澳洲幸运5官方开奖结果体彩网:jobs report beat analyst estimates, while consumer sentiment has jumped as 澳洲幸运5官方开奖结果体彩网:inflation fears fade.

-Terry Lane

'Obamacare' Has Never Been So Popular

More than 21.3 million people enrolled in Affordable Care Act health insurance marketplace plans for the 2024 open enrollment period, a record high and𓃲 a 16% surge from 2023, the White House said Wedܫnesday.

The open enrollment period began in November and ran through Jan. 15, with some states extending it as late as Jan. 31.

Two major factors have increased the appeal of ACA plans, which are🃏 privatel🍎y run health insurance plans subsidized by the federal government. 

First, millions of people have ✅been removed this year from 🅰Medicaid, the federal health insurance program for people with lower income after the expiration of a pandemic-era protection that prevented states, which administer the program, from removing ineligible beneficiaries. Many of those who lost their Medicaid health coverage can get it through the 澳洲幸运5官方开奖结果体彩网:ACA marketplace instead.

Second, ACA plans have gotten a lot cheaper since pandemic-era subsidies were extended through 2025 by President Joe Biden’s 澳洲幸运5官方开奖结果体彩网:Inflation Reduction Act. Now, 80% of people who signed up for the ACA found coverage for less than $10 a month, the White House said.

New GDP Numbers Are Released Tomorrow-Here's What to Expect

If forecasters are correct, U.S. economic growth ಞslowed sharply in the fourth quarter as high int🐭erest rates dragged the economy down, ending a surprising burst of growth fueled by consumer spending.

The output of the economy as measured by gross domestic product is expected to have grown at an inflation-adjusted annual rate of 2% in the fourth quarter, according to a survey of economists by Dow Jones Newswires and the Wall Street Journal. That would be less than half the 4.9% pace of the third quart🥂er and the slowest in more than a year.

The Bureau of Economic Analysis will release offic꧙ial figures on Thursday.

If forecasts hold, the GDP figure would highlight how the Federal Reserve’s campaign of anti-inflation interest rate hikes has taken a toll on the economy, although far less than most economists had anticipated. Since March 2022, the Fed has raised i🌞ts benchmark fed funds ♊rate to a 22-year high and held it the𒁃re, putting upward pressure on interest rates for all kinds of credit, including mortgages, car l⛄oans, and credit cards.

Read more about tomorrow's GDP forecast here.

Mortgage Rates Rose on Lower Interest Rates Last Week

With mortgage rates ebbing from the highs they reach💟ed in October, more homebuyers are being enticed back into the marꦅket.

Today's data from the Mortgage Bankers Association show mortgage applications increased 3.7% last week, continuing a string of 澳洲幸运5官方开奖结果体彩网:improving market activity. The data, which was adjusted for the Martin Luther King, Jr. holiday, shows that mortgage applications𝐆 were still about 15% lower t𝔉han a year ago.

Mortgage rates surged to nearly 8% in the fall, forcing some buyers out of the market. With rates now averaging 6.6% for a fixed 30-year mortgage, more homebuyers are 💦explori🐠ng their options.

Refinancing continued to be ൲unpopular in the high-rate environment, falling 7% from the prior week, and was 8% lower than last year. The average mortgage loan was $377,100, MBA reported. 

While dropping mortgage rates are bringing buyers back to the market, sellers are still reluctant to sell their homes because of the 澳洲幸运5官方🐽开奖结果体彩网:“lock-in” effect created by the hi🥂gher rates. More mortgage applications can show increasing demand, potentially bringing more home sellers into a housing market where low inventory has pushed up prices, making 澳洲幸运5官方开奖结果体彩网:homeownership🔯 increasingly ꦉunaffordable. 

-Terry Lane