The Biden Administration and the USDOT are working to crack down on "junk fees" by pushing airlines to improve customer service. American, Alaska, and Frontier Airlines have committed to guaranteeing that parents can sit with their children without paying extra fees. The USDOT has created a dashboard to help families determine which airlines offer this guarantee and which ones could charge extra.
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Mortgage applications have dropped to a 28-year low as mortgage rates continue to rise, according to the Mortgage Bankers Association. Refinances are more than 70% down from last year, and the housing market is still trying to adjust to the pandemic's impact on the economy. Joel Kan, MBA’s associate vice president of economic and industry forecasting, noted that the increase in mortgage rates has caused some buyers to pull back.
US economic strength was demonstrated in January, as the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 5.4% from a year earlier and 0.6% from December to January. Consumer spending also increased 1.8% from December, though goods prices declined 0.7%. The Core PCE index rose 0.2% from December to January, indicating that inflation remains entrenched in the US economy and the Fed is likely to keep raising interest rates.
Sam Bankman-Fried, the founder of crypto trading platform FTX, is facing 16 criminal charges, including conspiracy to operate an unlicensed money transmitting business, conspiracy to commit bank fraud, securities fraud, and money laundering. Prosecutors allege that Bankman-Fried directed tens of millions of dollars of illegal campaign contributions to elected officials as part of a “multibillion-dollar fraud.” If convicted, Bankman-Fried could face up to 20 years in prison.
A recent study from Cornell University has revealed that the number of work stoppages in the US has increased significantly in the past year, with 424 work stoppages of all sizes in 2022, up from 279 the previous year. This increase is indicative of a tight labor market, as workers take advantage of the situation to press employers for better pay and working conditions. Miller, a Teamsters Local 230 member, led one of these strikes, with 230 of his coworkers, in order to press their employer, Sysco, for better pay and working conditions.
Home Depot has announced a $1 billion investment in its hourly workers, raising their average starting salary to $15 an hour. This move comes in response to the current red-hot job market, where unemployment has reached its lowest level since 1969. Home Depot's decision to raise its starting pay follows similar moves by other large retailers such as Amazon, who announced in September that starting pay for warehouse and delivery workers would be more than $19 an hour. This increase will benefit all hourly workers in the U.S. and Canada.
The Congressional Budget Office (CBO) has released its updated 10-year Budget and Economic Outlook, predicting an unemployment rate of 5.1% this year and high interest rates and inflation. In response, Senate Majority Leader Chuck Schumer (D-N.Y.) has made clear that Democrats won't accept cuts to Medicaid, the government health insurance program for low-income Americans. The report serves as a reminder of the need to protect Medicaid and other safety net programs to ensure an equitable and sustainable economic recovery.
The White House has announced the appointment of Lael Brainard of the Federal Reserve as the new director of the National Economic Council. Brainard will be tasked with helping President Biden implement his economic agenda, including pandemic relief, infrastructure, and tax bills. However, the U.S. is currently at risk of defaulting on its debt in July if Congress does not act to raise or suspend the debt limit. Brainard's expertise and experience will be essential in helping the White House navigate this difficult situation.