Bankrate

The stock market's negative reaction to weaker-than-expected economic data, including the July jobs report, has increased focus on the possibility of a recession. The S&P 500 has lost 5% over five sessions but remains up 9% year to date and up 15% over the past year. Declines in the tech-heavy Nasdaq and small stock Russell 2000 have been more pronounced. Monday's decline was the worst on a percentage basis since 2022. To level set, perceived higher recession risk is not the same as near-term certainty about a downturn. As it stands, the Federal Reserve Banks of New York and Atlanta forecast Q3 annualized GDP above 2% after the Q2 rise of 2.8%, above the long-term trend. And, to begin the week, the Institute of Supply Management managers reported improving July activity in the nation's services sector, including rising jobs, new orders, and production measures. Some folks are calling on the Federal Reserve to go into crisis mode and cut interest rates before the scheduled mid-September meeting. From my vantage point, the current situation is a far cry from the depths of the COVID lockdowns, resulting in economic cratering, and the Great Financial Crisis when major financial institutions failed and millions were thrown out of work. The Fed's legal mandate involves stable prices and maximum employment as well as financial stability. A modest (so far) stock market sell-off is not part of that mandate. A bigger question, in my mind, is the future magnitude and trajectory of interest rate cuts by the Fed through year-end and 2025. Could there be more rate cuts than previously thought? Here's more from my Bankrate colleague Alex Gailey: https://lnkd.in/e6kSCJs7

Are you carrying a credit card balance month to month? If the answer is yes, you’re not alone. According to a new Bankrate survey, half of credit cardholders carry debt from month to month and of those credit card debt 60% have been in credit card debt for at least a year, that’s up from 50% in 2021. Inflation and interest rates prove to be the biggest factors contributing to debt, with 34% of credit card debtors say inflation has made their credit debt burdens worse since the beginning of 2022 while 32% point to high interest rates. “It's important to prioritize credit card debt payoff because this is probably your highest-cost debt by a wide margin,” notes Bankrate’s Ted Rossman. “My favorite tip is to move your debt to a new card with a lengthy 0% balance transfer promotion; some of these last as long as 21 months. If you have a lot of debt or a lower credit score, nonprofit credit counseling is probably your best bet”. For more, please visit: https://lnkd.in/ehehcQua

Two particularly unpleasant surprises were delivered in the July jobs report. The nation's unemployment rate rose unexpectedly to 4.3%. Payroll gains were weaker than expected with 114k jobs added, well below the consensus expectation and the 2024 average of about 200k monthly job gains. Does this make the case for a September interest rate cut by the Federal Reserve, which decided in recent days to keep them steady? It has much more data to digest until that meeting, including another jobs report and a host of inflation readings. Please share your thoughts in the comments section below and follow other developments regarding your finances at Bankrate.

Considering a move for retirement? In case you missed it, Bankrate recently published its annual study of the best and worst states for retirement. Delaware took the No. 1 spot this year, followed by West Virginia, Georgia, South Carolina and Missouri. The states that landed at the bottom were Alaska, New York, California, Washington and North Dakota. You may notice a common thread among the top 5 and bottom 5 states. The states at the top of the ranking are some of the most affordable states in the U.S., and you'll have an easier time stretching your dollars in retirement. States at the bottom of the ranking are much more costly to live in, especially when you're on a fixed income. When I asked financial and retirement experts what people should consider when deciding where to settle down, they listed off these six factors: 💸 The state of your finances: Can you afford to move somewhere for retirement? Understand how much retirement income you will need to live comfortably in your desired location and how long those funds will last, including Social Security, retirement savings and other assets like your home. 👫 Sense of community: Will you be close to family or friends? If not, see if you can easily join groups and meet people you can connect with, whether it’s joining a pickleball league or a volunteer organization. Consider testing the place out for three to six months before committing. 📈 Cost of living: Moving to a more affordable place can be an effective way to stretch your retirement savings. However, whether somewhere is considered “affordable” for you depends on where you’re moving from. Take into account the cost of housing, groceries, utilities, transportation and health care. 🏥 Quality, cost and proximity to health care: Medical and health care costs vary widely throughout the country, which is why it’s important to consider the out-of-pocket health care costs after Medicare, wherever you retire. You should also know whether the area provides the quality of the health care you need. 💰 Taxes: Consider how you’ll get taxed in the city and state you’re interested in moving to for retirement. ☀ Climate: It’s tempting to opt for warm, sunnier states with milder winters, like Florida, Arizona and South Carolina, but with natural disasters and temperatures on the rise, you may be shelling out more on electric bills and homeowners insurance in those places. Where did your state land on our ranking, and where do you see yourself retiring? More from me: https://lnkd.in/dYRt67q6

What to expect from this week’s Federal Reserve meeting: Bankrate’s Chief Financial Analyst Greg McBride, CFA, weighs in, noting that while a rate cut is unlikely, this decision from the Fed may be second guessed if we see weakening economic data over the next month or so. The Fed will be steering expectations towards a potential September rate cut, based on sustained progress in tackling inflation.

As I watch the news unfold today, my heart breaks for those impacted by the current Northern California wildfires. Climate scientists predict that summers will keep getting hotter, making wildfires spread to more locations and at a stronger intensity. Thankfully, I have never experienced a #wildfire before. The closest was last summer when the Canadian wildfires made it hard to be outside for most of the summer in Upstate New York. But, I have experienced other extreme weather events, and preserving life matters more than property. However, once you get to safety, the emotional and financial toll of losing your home is devastating. There is little you can do if a natural disaster hits you head-on. But you can mitigate the risk of damage to your home from indirect damage and consequential losses, even from wildfires, which people who don't live in wildfire-prone areas might think about. With #climatechange pushing wildfires into new regions, every homeowner should become familiar with how to protect or reduce wildfire damage to their home. Hopefully, my Bankrate article can help. #californiawildfires #homeinsurance

I recently spoke with CBS News about Bankrate's annual study of the best and worst states to retire. The big takeaway? Don't rule out unlikely places for retirement, and don't move somewhere for retirement just for the year-round warm weather or the beaches. Delaware isn’t typically thought of as a retirement haven, but if you dig into the data, you'll see that it checks a lot of boxes for retirees. With no state or local sales tax or income tax on Social Security benefits, it’s considered a tax-friendly state for retirees. On average, property taxes and homeowners insurance are also lower in Delaware compared to the rest of the country. Delaware scores well in diversity and overall well-being and has a large share of residents who are 62 and older compared to its population. Delaware also has a high number of health care establishments per capita and a robust health care system. The state’s weaker spots are its higher living and health care costs and higher crime rates compared to other states. West Virginia, Georgia, South Carolina and Missouri are a few of the other states that landed at the top of our ranking. If you could pick somewhere to spend your golden years, where would it be? #retirement #economy #retirementsavings #wheretoretire

Are you thinking about purchasing a new home? What mortgage rate would make you comfortable in that decision? Nearly half of current homeowners (47%) say mortgage rates need to be below 5% for them to be comfortable purchasing a new home this year, while 38% say they need rates to be below 4%, according to a new Bankrate survey. On the other hand, nearly 2 in 5 homeowners (38%) say there is no mortgage rate where they would be comfortable purchasing a home this year while 42% of current homeowners say there is no mortgage rate where they would be comfortable selling their home this year. “The mortgage lock-in effect has frozen home sales for the past couple of years,” notes Bankrate’s Jeff Ostrowski. “Alas, these results don’t bode well for an unfreezing of the market. Many homeowners aren’t keen to sell at all, and many would-be buyers are waiting for mortgage rates to dip below 6%”. For the full survey: https://lnkd.in/eRnqPpft

Bankrate’s annual best states to retire study is out and rounding out the 2024 best states to retire are: 1. Delaware 2. West Virginia 3. Georgia 4. South Carolina 5. Missouri Delaware is the best state to retire in 2024 as Iowa, last year's number one, drops to 9th place. This study ranked all fifty U.S. states by affordability (40% of the ranking), overall well-being (25%), quality/cost of health care (20%), weather (10%) and crime (5%). The worst state to retire for the second year in a row is Alaska, followed by New York, Washington, California, and North Dakota. Check out the official rankings and see where your state lands: https://lnkd.in/ezf7HRC