Credit Sesame’s personal finance news roundup for March 8, 2025. Stories, news, politics, and events impacting personal finance during the past week.
February 2025 job growth sub-par
Total US employment continued its winning streak by posting its 50th straight month of growth in February. However, February’s job growth of 151,000 was below the average of 168,000 for the prior 12 months. In another cautionary note, the employment report noted a decline in federal government jobs of 10,000. That’s well below the announced cuts in federal government jobs, suggesting that many of those cuts have not yet been reflected in the official employment statistics. See Employment Situation report at BLS.gov.
PCE index still elevated
The Personal Consumption Expenditures (PCE) price index increased by 0.3% in January 2025, matching the December 2024 increase. If continued over the year, a 0.3% monthly increase would amount to an annual increase of nearly 3.7%. This would represent an acceleration from the 3.0% increase over the past 12 months. The PCE price index is significant because it is the measure of inflation used by the Federal Reserve when making interest rate decisions. See details at BEA.gov.
Automakers warn of steep price hikes due to tariffs
A group representing nearly all major automakers in the United States warned that new tariffs could result in 25% price hikes for consumers. The group consists of almost every American and foreign carmaker that manufactures vehicles in the US. The sole exception is Tesla. The manufacturers noted that these tariffs would disrupt a supply chain integrated across North America for over 25 years. As for the potential of tariffs forcing manufacturing to return to the US, the automakers noted that this process would take many years and result in price hikes long before the country saw a substantial increase in manufacturing employment. Implementation of automotive tariffs has been postponed for one month, but it would take much longer to address the supply chain and manufacturing capacity issues. See article at Reuters.com.
Gender pay gap narrows a little
A new study by the Pew Research Center found that the gap between what men and women earn in the workplace has narrowed since 2003. Back then, the median hourly wage of US women was 81% of what men made. By 2024, it had risen to 85%. This gap has made more substantial progress over the longer term. Back in 1982, women’s median hourly wage was just 65% of what men made. The wage gap is much narrower among younger workers. As of 2024, women aged 25 to 34 earned 95% of what men in the same age group made. This compares to 74% in 1982 and 88% in 2003. See study at PewResearch.org.
Mortgage rates fall again for seventh week
30-year mortgage rates dropped sharply last week, falling 13 basis points to 6.63%. This was their seventh consecutive weekly decline, totaling 41 basis points. This negates part of the 96 basis point rise 30-year rates had previously made from the end of September through mid-January. 15-year mortgage rates have now fallen in six of the past seven weeks, for a total decline of 48 basis points. Last week’s drop in 15-year rates was 15 basis points, bringing them to 5.79%. See rate details at FreddieMac.com.
US productivity grew in 2024
Non-farm productivity grew by 1.5% in the fourth quarter of 2024, as output grew faster than the number of hours worked. For the full year, average annual productivity in 2024 was 2.7% higher than in 2023. Productivity gains can allow wages to grow without creating inflation pressure because workers produce more for each hour worked. See productivity report at BLS.gov.
Refinancing drives increase in mortgage applications
Mortgage application volume was up by a seasonally adjusted 20.4% last week. Refinancing activity increased by 37% last week and 83% over last year. Refinancing represented 43.8% of mortgage applications last week, up from 38.9% the week before. A sustained drop in mortgage rates over the last several weeks has fueled the increased interest in refinancing. See report at MBA.org.
Pending home sales reached a new low in January 2025
The National Association of Realtors’ Pending Home Sales Index fell 4.6% in January. That brought the index to its lowest point since it began in 2001. Pending home sales are considered a leading indicator of home sales. They represent sales agreements that have been signed but for which the transaction has not yet closed. Three of the four regions tracked by the index showed declines in January, with only the Northeast managing a slight increase. The South suffered the steepest drop in pending home sales, with a 9.2% decline in January. See details at NAR.Realtor.
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