Sarah Foster’s Post

How much money do you think you'd need to make to live comfortably? The numbers from Bankrate's annual Financial Freedom Survey are in. This year, the average American feels they'd need to make a whopping $186,000. To be sure, that's down from $233,000 in 2023 (perhaps because of moderating inflation?). Yet, the story hasn't changed: It remains well above what many workers are likely already making. The average full-time, year-round worker earned about $79,000 in 2022, according to the latest Census data. We even asked a new question this year: How likely do you think it is that you'll one day earn the annual income that you need to live comfortably? Just 6% of Americans are already making the money they feel they need. Meanwhile, 31% say it's unlikely they ever will and 18% think they never will. Americans I interviewed for the piece speak about financial security as if it's a bar that keeps getting pushed further and further away, largely because of inflation. “Once I get to a level of comfortability, it seems like something else happens or something else occurs, to where we’re knocked out of that comfort zone,” one family told me. Before you say that salary is unrealistic, take a look at these calculations I did from the Bureau of Labor Statistics' CPI Inflation Calculator: $186,000 has the same buying power as $48,444 in May 1980 and $76,516 in May 1990. The full report is linked below, and let me know in the comments what you think: Are people just inflating what it takes to live comfortably, or is it our perceptions of what Americans *should* be getting paid that's not keeping up with the rising cost-of-living? Would love to hear your thoughts! #litrendingtopics #economy #inflation

Who's better for the economy: President Joe Biden or former President Donald Trump? The past might be a guide. For the first time since Grover Cleveland ran for a nonconsecutive term in 1892, voters have records of how the two leading candidates managed the world’s largest financial system. To help Americans compare each president’s economic report card ahead of Biden and Trump's first head-to-head, my latest for Bankrate looks at data from Trump and Biden’s time in office on a sampling of economic measures, from hiring and unemployment, to stocks, growth, inflation and federal spending. I indexed those gauges to the start of each candidate's inauguration (January 2017 for Trump and January 2021 for Biden). Then, I took data over an equal timeframe. Since we only have data going up to May 2024 for Biden's term, I stopped my analysis in May 2020 for Trump's term. The findings: 📈 On inflation: Prices rose four times faster during Biden's term than Trump's. 📊 On the job market: The U.S. economy has created 15.6 million jobs. That compares with job losses totaling 12.6 million for Trump. 💵 Wages have boomed faster under Biden but lost more ground to inflation than they did under Trump. 💰 The S&P 500 stock index has risen 42.1% since Biden took office, compared with a 33.6% increase over the same time period for Trump Both presidents' economic outcomes greatly depend on who was in the White House during the economy’s plunge (Trump) and red-hot bounce back (Biden). “In a world where finger-pointing has become a contact sport, the quick answer is that virtually every stakeholder in the economy is responsible, to some degree, for inflation," as Mark Hamrick told me. Meanwhile, the economy was simply adding back the jobs that it lost to the pandemic for the first year and a half of Biden's presidency, helping Biden's score in the category. But even so, hiring boomed faster than its historic average and unemployment fell to even lower levels under the current chief executive. My question: Should presidents take the credit (or blame) for their economies, when it's often driven by broader, macro-level forces (cough: Federal Reserve)? Let me know what you think, and read our analysis:

What would you have to achieve in life to consider yourself financially successful? If your opinions mirror most Americans, you'd probably have to be: -Living comfortably (56%); -Financially prepared for the future (i.e. adequate savings/retirement) (44%); -Living debt free (41%); and -Never worrying about money (41%). Does that surprise you? Speaking for myself, when I got those findings back from my latest consumer poll at Bankrate, I was shocked. Those picks were more popular than having enough money to quit working (19%), being a millionaire (13%) and owning a business (11%). And most troubling of all: Just because those definitions appear more grounded, doesn't mean they're easier to achieve. Just 11% of Americans indicate that they've already achieved their vision of financial success, while 89% say they haven't. Meanwhile, 27% never think they'll be able to. Suddenly, a new term came to my mind: "Goals dysmorphia." It speaks to how this tough economic environment may be causing Americans to redefine their ideal living standards. Not to mention, in this high-rate, high-prices era, even the most prudent of personal financial goals can feel akin to "reaching for the stars." What do you think about these findings? And how would you define your vision for financial success? Let me know in the comments, and read more on my latest consumer poll here: https://lnkd.in/eDA4F2in

Are we finally seeing a return to disinflation? There's a lot to be happy about with this latest CPI report from the Bureau of Labor Statistics, even if no one is ready to declare mission accomplished. For starters, we should all celebrate a downside inflation surprise — the first time this year. My stories have been filed, and my excel files have been updated, so it's time to reflect on five key narratives that became clear to me in the latest report. 1) Consumers should hopefully be seeing significant improvement in food inflation. For the second time in three months, food prices didn't increase from the prior-month period, with prices remaining stable between March and April 2024. That helped the annual rate of food inflation stay steady at 2.2% in April. 2) Excluding food and energy, prices rose 3.6%, the slowest core inflation rate since April 2021. 3) Rent prices between March and April 2024 rose just 0.3%, the smallest monthly gain since July 2021. That helped bring the annual inflation rate down to 5.4%, now capping off 12 straight months of slowing rent inflation. That slowdown we've been waiting for is happening, even if it's taking longer than expected! 4) Falling energy prices still aren't helping us as much as they were at the end of last year. Energy prices have increased for three straight months, keeping costs 35.9% more expensive than before the pandemic. Driving those increases are rising gasoline expenses, up 2.8% from the prior month. 5) Last month, motor vehicle insurance inflation popped the most since July 2020. Although we didn't see as massive of an increase this month, those costs still rose 1.8%, the most since August 2023. The upshot? The "problem children" of inflation are now shelter and insurance, and volatile energy prices aren't making inflation any easier to beat. What's your baseline outlook for inflation over the rest of the year? Let me know in the comments, and read my latest analysis: #litrendingtopics #inflation #economy

At the start of the year, it seemed that Fed rate cuts were a question of when — not if. Now, it appears that the tables are turning. For nine months now, the Fed has been holding interest rates at a 23-year high of 5.25-5.5% to defeat the worst inflation crisis in 40 years. U.S. central bankers’ holding pattern with rates mimics inflation’s refusal to descend. Price pressures have proven more stubborn than expected for three straight months. And if the trends of the first quarter were to continue for a full year, inflation would heat up to 4.5%, more than double the 2% level officials shoot for, an analysis of BLS data shows. It’s threatening the golden economic path that officials thought they had toward the end of last year. A soft-landing of the U.S. economy seemed in reach as price pressures retreated rapidly without denting the job market or economic growth. It’s not as if inflation is moving in the wrong direction, just that it looks like it’s stuck in 3% purgatory. Gone are the tailwinds of falling energy prices as geopolitical tensions abroad weigh on oil supply. Meanwhile, auto insurance surged by the most since 1976 in March, as companies continue to catch up to the rapid jumps in medical care, repair services and vehicle parts prices. And then there’s shelter prices. U.S. central bankers have been expecting a slowdown, and real-time measures from BLS show one might already be afoot, but it’s yet to show up in the data. Taken together, prices on shelter, energy and insurance drove more than three-quarters of the 0.4% increase in inflation between February and March. What’s the Fed to do? Because I’m still thinking about Denis Villeneuve’s Dune films, one could say Fed Chair Jerome Powell needs his own “water of life” to see the “narrow way through” the twin shoals of recession and elevated inflation, so he can help the Fed guide the U.S. economy toward the historically rare and elusive soft landing. But this isn’t fantasy. It’s real-life policymaking, and it has the power to impact millions of Americans. Will the Fed still be able to cut rates in 2024? Read more: #litrendingtopics #federalreserve #economy

Hey business journalism/economy friends! Does tracking the latest up-and-coming personal finance trends energize you? Are you constantly thinking of questions that you wish you could survey nationwide consumers on? Do you feel at home in a Census Bureau table or FOMC post-meeting statement? Well, do I have the job opening of a lifetime for you! Bankrate is hiring a managing editor for surveys and data studies, so we can bring more first-class expertise to our team and ensure we're covering the economy/macro-level stories that matter most to Americans' wallets. The role is one of the most unique (and exciting, but I'm just biased) roles currently open on our team. One week, you could be helping shape a longer-form, investigate data project. The next, you might be helping me crank out news on Fed Day. If anyone's interested in applying or learning more, please feel free to reach out!

NEWS: The Federal Reserve gave consumers and investors the clarification they've been waiting for: That two months of hotter-than-expected inflation data aren't yet causing them to rethink their plans for rate cuts in 2024. The FOMC decided to leave their key benchmark interest rate at a 23-year high of 5.25-5.5%, while also signaling in their latest projections that they plan to cut interest rates three times in the year ahead — matching projections from three months ago. The news is somewhat surprising, considering that inflation is in a bit of a holding pattern. The U.S. central bank closed out 2023 on a high note: Inflation ended up slowing two times faster in the year than officials had initially expected, recent data from the Department of Commerce shows. Back in December 2022, Fed officials penciled in a 3.1% annual inflation rate for the fourth quarter of 2023. Prices ended up rising just 2.8%. But progress has been much more limited in a separate measure: the consumer price index (CPI). Consumer prices have been holding at about 3% for four months now, validating Fed Chair Jerome Powell’s claims that the final mile of bringing inflation down to their ultimate 2 percent goalpost could be the hardest. Guiding the Fed’s restraint with rate cuts is the fear of letting up on the brakes too soon, while the solid economy is giving the Fed some room to be patient. But even the Fed might say it’s starting to eye early-warning signs of a labor market slowdown. Unemployment has held below 4 percent for the longest stretch of time in more than half a century but has been slowly ticking up, hitting the highest level in two years in February. The share of workers voluntarily quitting their positions has also rebounded back to pre-pandemic levels, a sign of decreased confidence in the economy. At what point will the Fed decide that the risks of doing too much far outweigh the risks of not doing enough? Let me know what you think in the comments, and read our recap of the news:

I've been covering the U.S. economy for seven years now, and few subjects that I report on leave me with as many mean reader emails as the gender pay gap. That's despite almost every metric telling the same story — that working men and women aren't paid equally. Bureau of Labor Statistics data for 2022 estimates women earned 83 cents per every dollar a man was paid, the smallest gap on record. Census Bureau figures, meanwhile, suggest a 84 percent female-to-male earnings ratio. Size of the gap aside, pay disparities can significantly compound over the course of a woman's career. Another way of illustrating the impact: The median earnings for full-time, year-round male workers in 2022 was $62,350 and $52,360 for women, according to Census. Over the course of 20 years, that would amount to an almost $200,000 difference (assuming both groups' pay stayed the same). The gender pay gap exists across every industry. Legal occupations have the widest gap, at roughly 54 cents, Census data shows. The community and social services industry has the smallest, at about 98 cents. Working mothers likely face an even wider gap. Single mothers who earn less than $30,000 a year made up 41% of all single mothers in 2022, while single fathers in the same income category make up just 22% of their cohort. I recently featured eight women's stories about how they're navigating the gender pay gap in their own careers. Overwhelmingly, the women I interviewed stressed the power of salary transparency, including talking with coworkers about how much money they're making. Read more on their tips and tricks:

Today, on #internationalwomensday, I can't help but think of one of my many interviews with Lauren Anastasio, MBA, CFP®. It was June 2022, and our latest consumer poll at Bankrate had showed that women were disproportionately feeling more stressed about their finances. To be sure, the economy wasn't easy for anyone back then; data would later show that annual inflation hit a 40-year high of 9.1% that month. But it was clear in our data that those macroeconomic challenges were disproportionately weighing on women's wellbeing. More than 2 in 5 (46%) said money issues prompted feelings of anxiety, depression, sleeplessness and stress, versus 38% of women who said the same. The upshot of the story, guided by Lauren's insight: Women feel behind in normal times thanks to long-running economic barriers — from the gender pay gap to a disproportionate child care burden. But when the economy isn't working in anyone's favor, those vulnerable groups get knocked back even further than everyone else. “In so many ways, women are taking on the burden of the household, whether it’s just managing the finances at home or actually raising children or supporting other family members,” Lauren said. (If you want to walk down memory lane, here's a link to the article: https://lnkd.in/gD4sincN) I am thankful for the many women who have shared their stories with me over the years, a practice that is especially important for reporters covering an ecosystem as complex as the U.S. economy. Livelihoods, dreams and experiences are at the very root of economics, but they're hard to find in numbers alone. And to honor the day, here are four more highlights of the stories/lessons that have stood out to me in my reporting most, from my latest story on Bankrate: https://lnkd.in/eryDB-v4 #IWD2024