U.S. Economy Grew at 4.9% Rate over the Summer, Powered by Fast-Spending Americans​​​

U.S. economic growth surged this past summer, as consumers boosted spending ahead of growing challenges that could limit their ability to maintain the momentum, the Wall Street Journal reported. Gross domestic product grew at a seasonally and inflation-adjusted 4.9% annual rate in the third quarter, the Commerce Department reported Thursday. That was the fastest rate since late 2021 and much stronger than economists were anticipating just a few months ago. The economy expanded 2.1% in the second quarter. This year’s economic resilience could soon face tests, however. Rising long-term interest rates, wars in Ukraine and the Middle East, and the possibilities of a partial government shutdown and prolonged labor strikes are all factors that could cause economic cracks to emerge. The big reason for the summer’s blowout growth: Americans stepped up spending, defying expectations that they would pull back due to a series of interest-rate hikes from the Federal Reserve aimed at cooling inflation by slowing the economy. The economic acceleration, which was foreshadowed by strong hiring and retail data, won’t change the Fed’s plans to hold rates steady at their meeting next week. Consumer spending rose at an annual rate of 4.0% in the third quarter, jumping from a gain of 0.8% in the prior quarter and the largest increase since the fourth quarter of 2021. (Subscription required.) Read more.
 

Weekly Applications for U.S. Jobless Benefits Tick Up Slightly​​​

The number of Americans applying for jobless benefits rose last week but remains historically low as the labor market continues to show strength amid high interest rates and inflation, the Associated Press reported. Jobless claim applications rose by 10,000 to 210,000 for the week ending Oct. 21, the Labor Department reported Thursday. The previous week's applications were the fewest in eight months. The four-week moving average of claims, which smooths out some of the week-to-week volatility, rose by 1,250 to 207,500. Overall, 1.79 million people were collecting unemployment benefits the week that ended Oct. 14, about 63,000 more than the previous week. Read more.
 

CPEX 23 Gets Underway on Monday! Don't Miss 25+ Hours of Live and On-Demand CLE Programming All for $100!

Leading practitioners will be examining key issues across the consumer bankruptcy landscape during ABI’s 2023 Consumer Practice Extravaganza (CPEX), starting Monday via a state-of-the-art virtual platform. There is something for every level of consumer practitioner, including deep dives into student loans, technology and the future, subchapter V of chapter 11, tax issues and more! The program will also feature an exclusive “Fireside Chat” with Tara Twomey, who was appointed as the director of the Executive Office of U.S. Trustees earlier this year. Registration for the entire virtual conference is only $100, and all sessions will conveniently remain available to attendees for 30 days after the conclusion of the conference. Register today!
 

Car Payments Are Squeezing Owners as Economy Tightens​​​

Americans are struggling to keep up with their car payments at the highest rate in decades, as the economy shows signs of tightening following more than a year of counter-inflationary measures, The Hill reported. Some 6.11 percent of subprime borrowers — who typically have lower credit scores and face higher interest rates — were more than 60 days past due on their auto loans in September, according to Fitch Ratings. This marks the highest delinquency rate in Fitch’s data, which spans nearly three decades from 1994 to the present. The previous high on record occurred in October 1996, when the 60-day delinquency rate among subprime borrowers rose to 5.96 percent. Earlier this year, the delinquency rate inched toward that record, reaching 5.93 percent in January before falling to 4.67 percent in April. Read more.
 

Analysis: Cost of Buying a Home vs. Renting Grows with Rising Mortgage Rates​​​

Getting on the property ladder has rarely been tougher for first-time buyers. But a tight housing market isn’t turning out to be a bonanza for landlords either, the Wall Street Journal reported. The cost of buying a home versus renting one is at its most extreme since at least 1996. The average monthly new mortgage payment is 52% higher than the average apartment rent, according to a CBRE analysis. The last time the measure looked out of whack was before the 2008 housing crash. Even then, the premium peaked at 33% in the second quarter of 2006. In theory, buying and renting costs should be roughly matched, according to Matt Vance, head of multifamily research at CBRE. Although owners benefit when house prices go up, they also put more cash into their homes than tenants for things such as repairs and refurbishments. From 1996 to mid-2003, the average cost to buy or rent did indeed work out more or less equal. After the global financial crisis, though, rock-bottom interest rates and plenty of housing supply meant it was 12% cheaper on average to buy a home than to rent one during the 2010s. The current hefty ownership premium reflects the surging cost of debt as rates on a 30-year mortgage reach 8%, as well as high house prices, since pandemic lockdowns raised the value of domestic space. (Subscription required.) Read more.
 

Study: Retail Theft Increases over Last Year​​​

Retail crime has been on the rise in the U.S., forcing some major retailers to even close locations in response, The Hill reported. The National Retail Federation (NRF) recently released its 2023 Retail Security Survey with insights from 177 retail brands, which accounted for $1.6 trillion of annual retail sales in 2022 and represent more than 97,000 retail locations across the U.S. Overall, retailers that participated in the survey reported that inventory loss — called shrink — clocked in at an average rate of 1.6 percent last year, representing $112.1 billion in losses. That’s up from 1.4 percent the previous year. The greatest portion of shrink — 65 percent — came from external theft, including products taken during organized shoplifting incidents. Read more.
 

As Child-Care Crisis Looms, Biden Asks Congress for Urgent Help​​​

The Biden administration asked Congress for $16 billion in child-care funding on Wednesday, part of its push to keep the expiration of COVID aid from upending essential services for millions of families, the Washington Post reported. The funds account for about one-third of the roughly $56 billion the White House is seeking for domestic needs, including high-speed internet access and natural-disaster relief. It comes on the heels of a separate $106 billion request for international priorities, including funding for Ukraine and Israel. The White House is also asking Congress to approve $23 billion in disaster relief, including for the wildfires that struck Hawaii and floods in California and Vermont; $6 billion to extend internet access for millions of low-income households; and billions more for communications infrastructure and energy needs, as well as money to counter fentanyl and prevent firefighters battling wildfires from seeing their pay cut. The child-care funds, which would be distributed to all 50 states and the District of Columbia, would provide a year of stabilization funding for more than 225,000 child-care providers throughout the country. Many received similar allotments during the pandemic, when Congress set aside a record $24 billion to help keep child-care facilities open. The last of those funds expired at the end of September, leaving many providers struggling to stay open. As many as one in three child-care centers could soon close, leaving some 3.2 million children without care, according to estimates from the Century Foundation, a liberal think tank. Some child-care providers say they’ve already had to lay off workers or raise fees to make up for the loss in federal funding, and many expect the situation to become even more dire in the coming months. Read more.
 

Vacancy Announcement for Bankruptcy Judgeship for the District of New Hampshire​​​

The U.S. Court of Appeals for the First Circuit is seeking applicants for a bankruptcy judge position in the U.S. Bankruptcy Court for the District of New Hampshire in Concord. The jurisdiction of a bankruptcy judge is specified in Title 28, United States Code, §§ 151-158, and explained in Title 11, United States Code, § 101, et seq. Attorneys are encouraged to apply, even if their experience is not specifically in bankruptcy law. Interested applicants may obtain an application on the Court of Appeals' website at https://www.ca1.uscourts.gov/employment. Persons applying for this position and willing to serve if selected should personally submit their applications to Susan Goldberg, Circuit Executive, via email at ca01_chjobs@ca1.uscourts.gov. Any applicant must comply with the financial disclosure requirements pursuant to the Ethics in Government Act of 1978, Title 5, United States Code Appendix, §§ 101-111, as implemented by the Judicial Conference of the United States, and will be required to satisfy FBI and IRS background investigations prior to appointment. The term of office is 14 years, and the current salary is $213,992. Applications are to be received no later than Monday, November 27, 2023. Persons will be considered without regard to race, color, age (over 40), gender, religion, national origin, disability, or sexual orientation. 

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