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Today's CPI report appears to nearly solidify that the Federal Reserve will likely stick with a smaller quarter-point cut when it announces its interest rate decision next week. Let's start with the good news: Prices are continuing to slow. On an annual basis, overall inflation increased just 2.5%, the smallest since February 2021 (when inflation was just 1.7%). Perhaps most important for consumers, the BLS' measure of grocery prices increased just 0.9% from a year ago, the slowest gain since February 2020. On a monthly basis, those costs held steady for the fourth time this year. Even energy and gasoline were major bright spots in the latest report. Energy prices dipped 4% from a year ago, the sharpest decline since January. Gasoline costs sank 10.3%, the biggest decrease since July 2023. But it's not the measure that matters most for Fed policymakers. Excluding the volatile food and energy prices, so-called "core" inflation increased 0.3% from a month ago, marking the second straight pick up in a measure that experts say better reflects "underlying" inflation. The big troublemaker remains shelter, which accounted for 74% of the annual increase in prices last month, Bankrate calculations show. Last month, those prices rose the most since January. Car insurance remains another problem spot for consumers. Motor vehicle insurance rose 16.5% from a year ago and is up 49.8% since the start of the pandemic. And after a hot summer of travel, hotels and motels increased 1.8% from a year ago, the sharpest pickup since January. No matter what, it's important to always think about inflation the way consumers do. Slowing inflation does not mean prices are falling — just that they aren't increasing as quickly as they once were. Prices are up 21.2% since the pandemic began, meaning Americans would need about $1,212 to buy the same goods and services that originally cost $1,000. Those small changes can add up over time, with the extra expenses totaling $2,544 over a 12-month period. How are you feeling about inflation — and Fed policy — after the latest report? Read our new analysis: https://lnkd.in/eT7rFi9E

Having lived through many an election cycle, I don't recall a time when housing affordability was elevated to the level of discussion and concern we're seeing in 2024. There's no question that many Americans view home ownership, thought of as part of the American dream, as currently unattainable. This is a function of the steep rise in home prices and still elevated mortgage rates. For better or for worse, home ownership is the primary path toward wealth creation in our country. So, many people are not participating in that journey as it now stands. Can elected officials, including a new president, make a difference? We take a look via my colleague Andrew from Bankrate:

Are you financially prepared to weather the storm? ⛈️ Over one in four homeowners (26%) say they feel financially unprepared for potential costs associated with an extreme weather event according to Bankrate’s new extreme weather survey. Additionally, 15% of homeowners say they would not be able to pay their deductible without going into debt should their home experience damage from an extreme weather event. 43% of homeowners admit that they have not taken action in the past five years to protect against damage due to extreme weather while 39% say they have reviewed their home and/or auto insurance policies to ensure they had proper coverage. “Extreme weather has changed the insurance landscape, and understanding your home insurance policy coverage is more critical now than ever,” notes Bankrate Analyst Shannon Martin. “Many insurance companies have reevaluated how they rate extreme weather, and some have changed the perils they are willing to cover.” For more information about this survey, visit: https://lnkd.in/eybEBHyM

What to make of the job market, which is in flux? Hiring is slowing with August payrolls rising by 142,000 jobs, above the average of the past three months which is just 116,000 jobs added. The unemployment rate slipped 0.1% to 4.2% The long-term average for the U.S. is 5.7%. We're well below that level and hope it stays that way. The question for the Federal Reserve: It is not whether to reduce interest rates, but by how much. Here's my quick take:

Is it ever too early to start thinking about holiday shopping? Ready or not, the holiday shopping season is right around the corner and a new Bankrate survey found that almost half of shoppers are planning to begin their holiday shopping by Halloween and just 24% of shoppers say they plan to spend more than last year. Inflation may be playing a role in the pullback in spending, as a third of holiday shoppers say it will change the way they shop this year (34%) and more than 1 in 4 shoppers saying they are stressed about the cost of holiday shopping (28%). "It seems that holiday shoppers will be more frugal this year, as multiple years of high inflation and high interest rates have taken a considerable toll,” notes Bankrate Senior Industry Analyst Ted Rossman. “With credit card rates near record highs, consider setting aside money from every paycheck between now and the end of the year to create a holiday shopping fund that keeps you out of credit card debt." When do you plan to start your holiday shopping list this year? Check out the full survey: https://lnkd.in/e4-D683i

The August jobs report due to be released this coming Friday is the last one before the Federal Reserve meets on interest rates in mid-September. The previous reading for July set off a growth scare in financial markets, sending stock prices down for several days. The unemployment rate rose to 4.3% and 114k jobs were added to payrolls, well below expectations. Workers are concerned about the outlook. A @Bankrate survey finds 70% of workers have some level of worry about job security and nearly half plan to look for work in the next 12 months. What should we expect in the updated report? Here's my video with some key things to watch.

I never would have guessed that my career path would turn me into someone who loves to sit around and talk about insurance all day, but it did! 🤓 Last week, I was thrilled to join Gary Harper from Arizona's Family's On Your Side Podcast to break down Bankrate's Hidden Cost of Car Ownership Study. If you want to hear some good coffee talk and tips on how potential car owners can avoid costly mistakes, give it a listen! #carinsurance #carownership https://lnkd.in/gNJtC6jV

Personal finance advice asks a lot of people: save early, pay off debt aggressively (or avoid going into it in the first place), live frugally, and eat rice and beans forever. 🍚 But the reality is people will make financial mistakes. In fact, financial mistakes are really, REALLY common. New from me: A new study from Bankrate out this week shows that 77% of people have a financial regret, including not saving for retirement early enough, not saving enough for emergency expenses and taking on too much credit card debt. 💸 Americans are saying they want to recover from these mistakes, but they're running into blockers. 45% of people with a financial regret say they haven't been able to make progress on it (like saving more for retirement) because of inflation and high prices. 📈 The takeaway? 🤔 Inflation may be slowing, but we're still seeing its effects on many Americans. If the past few years affected someone's finances, factors like inflation and high prices are negatively affecting people's ability to recover. Folks in a high amount of debt may have a plan to pay it off, but what they don't have is the funds. Check out the link below to see the full results of the study! #economy #personalfinance #consumerdebt #debt

Do you have any regrets when it comes to your finances? Americans continue to see inflation weigh on their wallets, a new Bankrate survey found that 77% of Americans say that they have a financial regret. The top 5 financial regrets Americans have are: 1. Not saving for retirement early enough (22%) 2. Not saving enough for emergencies (18%) 3. Incurring too much credit card debt (14%) 4. Incurring too much student loan debt (5%) 5. Not saving enough for children’s education (4%) Further, 40% of those with financial regrets haven’t made any headway in addressing them over the past year. Does any of our recent data surprise you? Let us know in the comments. “Saving is a lot less painful than dealing with the debt that results when you don’t have it,” says Bankrate Financial Analyst Greg McBride, CFA. “Paying down debt means doing without, cutting spending, or working more. Saving for retirement and emergencies can be automated through payroll deduction, direct deposit, and automatic transfers. Start modestly and after a couple of pay periods you won’t miss what you don’t see.” For the full survey, visit: https://lnkd.in/gY9btiAx

Inflation has now slowed for four straight months. Have you felt it? If the answer is no, it might not be so surprising. Prices are up just 2.9% from a year ago, reflecting massive improvement after inflation increased at a staggering rate of 9.1% back in June 2022. Yet, since the coronavirus pandemic-induced recession began in February 2020, consumer prices have increased 20.9%. That means Americans would need about $1,209 to buy the same goods and services that cost $1,000 before the outbreak. That’s well beyond the levels of inflation consumers are used to experiencing. For comparison, inflation rose 18.9% in the 2010s, 28.4% in the 2000s and 32.4% in the 1990s — and those rates were during a full decade, not just four years. It’s worth noting that moderate levels of inflation can actually benefit consumers, as it signifies economic growth and business expansion, leading to increased employment opportunities and higher wages. The slowdown is also a positive sign for the Fed, as officials try to figure out when it could be time to start dialing back how much they’ve been restricting economic growth. Fed Chair Jerome Powell is likely to point to how far officials have come in his anticipated Jackson Hole address on Friday. He’s also likely to talk about how the job isn’t over. Too much inflation feels akin to taking a pay cut. Of the nearly 400 items tracked by the BLS, only about 6% are currently priced lower than they were before the pandemic. Inflation is most notable in essentials, with food items making up 6 of the top 10 most inflated items since the pandemic. Grocery prices, in particular, have soared 25.2% compared to pre-pandemic levels. That costs a lot over time. Say someone spent $100 on groceries every week before the pandemic. Adding inflation into the mix, that new weekly expense would total $125.20 — amounting to an extra $100.80 every month and $1,209.60 over the course of a full year. With prices unlikely to ever go back to pre-pandemic levels, the key to feeling better relies on consumers recovering their lost purchasing power. As inflation slows down, there is a window of opportunity for wages to catch back up — and since last year, worker pay has been rising at a faster pace than prices. Yet, that relies on the economy continuing to avoid a recession. Higher unemployment and fewer job opportunities strips away workers’ bargaining power. Of course, it also could weigh on inflation too. What do you think is more painful for everyday Americans: unemployment or inflation? And considering that consumers have already been pretty downbeat about the economy and their finances because of high prices, how do you think a slowing job market could impact sentiment? More from me: https://lnkd.in/eT7rFi9E