Inflation Increasing at Fastest Pace in 40 Years​​​

Prices continued their upward march in January, rising by 7.5 percent compared with the same period a year ago, the fastest pace in 40 years, the Washington Post reported. Inflation was expected to climb relative to last January, when the economy reeled from a winter coronavirus surge with no widespread vaccines. Today’s new high inflation rate reflects all the accumulated price gains, in gasoline and other categories, built up in a tumultuous 2021. In the shorter term, data released Thursday by the Bureau of Labor Statistics also showed prices rose 0.6 percent in January compared with December, the same as the November-to-December inflation rate, which officials revised upward slightly. As with previous months, higher prices reached into just about every sector of the economy. Increases in the costs of food, electricity and shelter helped drive inflation higher in January, with household furnishings, clothing and medical care becoming costlier, while used-car costs continued to spiral, albeit at a slower pace than in prior months. Compared with 2021, the energy index rose 27 percent and food rose 7 percent. Also, the cost of food rose in January compared to December, with cereals and baked goods increasing the most. Fruits and vegetables also edged upward.

Program to Cut Health Care Providers’ Student Debt Sticks Some with Even More​​​​​​

Thousands of health care workers join the National Health Service Corps each year, pledging to work in places with too few medical providers in exchange for help repaying their student loans, yet job disruptions caused by the pandemic have shaken that bargain, the Wall Street Journal reported. Layoffs have put a growing number of these workers in violation of their contracts and exposed them to heavy penalties, sometimes many times the aid they received. Instead of financial relief, they risk falling far deeper in debt. The Service Corps provides primary health care to close to 21 million Americans. Thanks to an $800 million funding boost last fiscal year, health care workers’ participation surged 23% to nearly 20,000 clinicians, its highest field strength ever. Signing a contract with the Service Corps can yield tens of thousands of dollars of student-loan relief. But if participants lose their jobs and can’t find others that qualify, they owe the government $7,500 for every month left in their contracts, plus interest, currently at more than 9%. The rules have been in place for two decades, but the pandemic has put new pressure on participants as some stressed hospitals and clinics furlough workers and close facilities. The U.S. health care sector lost 1.4 million jobs shortly after the coronavirus struck, when clinics cut services and saw their revenues fall. As of November, there were 2.7% fewer U.S. health care jobs than pre-pandemic — this despite some hospitals grappling with staff shortages and overworked providers nearly two years into COVID-19. (Subscription required.)

Unemployment Claims Drop for Third Straight Week​​​​​​

New applications for jobless aid declined by 16,000 last week, dropping for the third consecutive week, according to figures released by the Labor Department, The Hill reported. For the week ending Feb. 5, seasonally adjusted initial claims reached 223,000, the data found. The four-week moving average was 253,250 last week, 2,000 less than the revised average from the previous week. In November, jobless claims decreased to levels not seen since before the onset of the pandemic. However, those numbers turned around in the weeks that followed, as applications for jobless aid rose while the omicron variant fueled a surge in coronavirus infections. The Labor Department also recorded 6 million Americans in January who reported being unable to work last month due to a pandemic-related closure or lost business. The figure is nearly twice the level of 3.1 million the agency recorded in December.

U.S. Housing Affordability Worsens​​​​​​

U.S. housing affordability worsened in the fourth quarter as home prices rose alongside mortgage interest rates, the Wall Street Journal reported. The COVID-19 pandemic helped spark a nationwide housing boom, with prices rising rapidly in every corner of the U.S. But intense competition has pushed more buyers out of the market, especially at lower price points. Price growth for previously owned homes, which make up most of the housing market, slowed in the fourth quarter from earlier in the year but remained unusually strong due to robust demand and a shortage of homes for sale. The median sales price for single-family existing homes was higher in the quarter compared with a year ago for 181 of the 183 metro areas tracked by the National Association of Realtors, the association said today. In the fourth quarter, the typical monthly mortgage payment for a single-family home rose to $1,240 from $1,039 a year earlier, NAR said. Median prices rose by more than 10% from a year earlier in 67% of the 183 metro areas, a slowdown from the third quarter, when 78% of metro areas reported double-digit-percentage growth. (Subscription required.)

Latest Installment of ABI's Industry Viewpoints Examines Commercial Real Estate Trends​​​​​​

Be sure to catch the latest episode of ABI's Industry Viewpoints, featuring ABI Editor-at-Large Bill Rochelle talking with Michael M. Eidelman of Vedder Price (Chicago) about the state of commercial real estate, as well as his thoughts on the industry going forward into 2022. Eidelman was a panelist on the “Real Estate Restructurings in the Aftermath of COVID-19” panel at ABI's 2021 Winter Leadership Conference. Watch the new segment by clicking here.

Essential Concepts in Hospitality Industry Legal Issues Will Be Examined During Special abiLIVE Next Wednesday! ​​​​​​

The hospitality sector is unique in that even before the fundamentals of bankruptcy restructuring come into play, practitioners must first focus on the basic blocking and tackling of the legal issues that are unique to the hotel business. Examples include brand flag licensing agreements, hotel management agreements, Property Improvement Plans (PIP) and more. A special abiLIVE next Wednesday will feature an expert panel focusing on these issues to prepare attorneys, financial advisors and other professionals for future restructuring assignments in this industry. Complimentary registration.

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!

Tap into Rochelle’s Daily Wire via the ABI Newsroom and Twitter!