US employment growth ended the year on a strong note with solid growth. (iStock)
Latest figures show employment rose by 216,000 in December Overview of employment situation We were able to end 2023 on a strong note, exceeding expectations from the U.S. Bureau of Labor Statistics (BLS).
Employment growth in December was seen in several industries, including government, health care, social assistance and construction. The unemployment rate was 3.7%, unchanged from last month, and the number of unemployed people in the country remained at about 6.3 million. Since March 2022, the unemployment rate has ranged from 3.4% to 3.9%, according to the BLS. Average hourly wages for private sector employees rose 4.1% last year, and 0.4% month-on-month.
Due to the positive report, there is a possibility that the US Federal Reserve's reversal schedule for raising interest rates by the end of this year will be delayed. At its December meeting, the central bank Announcement of third interest rate suspensionAs a result, the federal funds rate was left unchanged at 5.25% to 5.5%, the highest level in 22 years. But Fed officials have signaled they may start cutting rates later this year, with interest rates expected to fall to 4.6%. Latest economic forecasts This was revealed in the central bank's Summary of Economic Projections (SEP).
“Job creation remains strong, but the sustained strength in wage growth is a concern for policymakers and may lead to changes in interest rate policy,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, said in a statement. “It may resist a short-term reversal.” “For the time being, the Fed appears content with a 'status quo' mentality.”
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You need to reduce the rate to move the needle on the housing
Home prices are still rising, and the extent to which mortgage rates fall this year will be a key factor in determining home affordability and overall housing market activity.
Average interest rates on 30-year fixed-rate mortgages are below 7%, but far from below the pandemic low of 4%. Economists predict that mortgage rates will continue to fall if the Fed lowers rates in 2024. It is predicted that interest rates could fall to 6% by the end of this year.
“We expect the economy to slow in 2024, which will likely lead to higher unemployment,” Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, said in a statement. “In terms of the impact on the housing market, these data are likely to prevent further interest rate declines at this point, but we expect mortgage rates to decline throughout the year as the economy slows.”
Homebuyers can find the best mortgage rates by researching and comparing options. Visit online marketplaces like Credible to compare interest rates, choose loan terms, and get pre-approved from multiple lenders at once.
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How to increase your chances of buying a home in 2024
Despite rising home prices and rising mortgage rates, 13% of Americans still plan to buy a new home in 2024, according to a recent survey. investigation According to IPX1031. Here are some steps you can take this year to make your homeownership dreams a reality.
Improve your credit and increase your purchasing power
Buyers can save even more money on their mortgage by understanding and improving their credit.a Jiraud analysis Researchers found that a borrower with an “excellent” credit score (760-850) would pay less in mortgage interest over the life of a 30-year fixed-rate loan, based on a typical home price of $354,165. It showed that you could potentially save up to $103,626.
Find out how much you can realistically afford
Setting realistic goals for the type of housing you can afford will set you up for success. This number should include all monthly costs, not the list price.
Zillow recommends that buyers start with their mortgage calculator and affordability tools to understand what they need for their mortgage payment and what they can realistically afford to pay each month.
If you're ready to consider a mortgage, Credible Marketplace lets you quickly compare interest rates from multiple mortgage lenders and get pre-qualified in minutes.
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