It was another exciting week for the US as various financial data was published. Additionally, much of the US was fixated on the Chinese balloon that floated from Montana to just off the coast of South Carolina before being shot down by the US military.
The big news this week was the jobs report for January. This week’s report highlighted that 517,000 jobs had been created, and unemployment fell to 3.4%, which was almost a 50-year low. This was a big surprise to analysts as it exceeded expectations. It is too early to suggest the economy has found the correct path, but this was unexpectedly good news for the week. Many families are still struggling with high costs for nearly everything. Some locations still have increased gas prices of over three dollars a gallon. Gas prices have come down over the last six months; however, we are still above average from two years ago. Not only are families feeling the price crunch at the pump, but gas prices continue to affect airlines as we have seen airline ticket pricing running nearly 30% higher. This increased pricing is undoubtedly weighing on potential customers as they look at summer travel. We’re still months away, but many families begin to look at summer travels 4 to 6 months out, and as prices remain high, this will likely weigh heavily on the families’ decisions.
Other news coming out this week is the continuing layoffs for countless companies. As I reported over the last couple of weeks, multiple companies such as Facebook, Spotify, and Amazon have been laying off thousands of employees to start the year off. This week, FedEx and Rivian announced that they would be laying off additional employees as part of cost-cutting strategies.
The federal reserve met this week and decided to raise interest rates by a quarter of a percent. This was a significant adjustment from the previous meetings, as the interest rate hike was not as severe as the last meeting. The smaller hike highlights that the Federal Reserve believes we are on the right track for curbing record-high inflation. With that said, the Fed has already signaled that we can expect additional rate hikes in an effort to continue to bring down inflation. The Federal Reserve will meet again in March, and we can expect another quarter percent hike based off current trends. Over the next few months, we can anticipate the Fed to analyze the economic data closely to decide how great of an interest rate hike is needed to continue strengthening our economy.
As we move on from the holidays and slowly approach tax season, this is a good time to scrub your credit card statements and your outstanding debt. Take the time to gather your tax documents to ensure you account for all eligible deductions. President Biden has passed multiple laws, including various rebates for electric vehicles and electric stoves. Do your homework and not miss out on these valuable tax deductions. Moreover, if you anticipate a refund this year, you will want to start looking at the best way to utilize this influx of money. As costs remain high, a refund check may be best served to pay down existing debt or save for your anticipated expenses this year.
Lastly, this week we saw House Republican leader Kevin McCarthy meet with President Biden to discuss the looming debt ceiling. The White House and the GOP still appear at odds with each other on the best way to move forward. The recent meeting may pave the way to finding some common ground on establishing a balanced budget while ensuring the US can meet all of its financial needs.