• Despite high interest rates, a resilient economy created more jobs than expected

By Neirin Gray Desai Consumer reporter for Dailymail.Com

Published: 09:08 EST, March 8, 2024 | Updated: 09:14 EST, March 8, 2024

• Torsten Slok said high rents and a glowing economy mean interest rate cuts are unlikely
• Slok joins a growing chorus of voices claiming that the war on inflation is not yet over
• Fed Chairman Jerome Powell indicated today that there is no rush to cut interest rates

By Helena Kelly Assistant consumer editor for Dailymail.Com

Published: 12:29 EST, March 6, 2024 | Updated: 12:29 EST, March 6, 2024

Americans are staying in their homes before they sell for twice as long as they did in 2005 – and baby boomers are to blame.

According to a new report from Redfin, the average homeowner today spends 11.5 years in their home, compared to 6.5 years 20 years ago.

Researchers say the trend is driven by older homeowners who aren't “financially incentivized” to move. A shortage of homes on the market is driving up prices.

It comes after former Oppenheimer analyst Meredith Whitney told DailyMail.com that home prices will finally start to fall as more seniors downsize, freeing up homes.

Homeowner tenure peaked at 13.4 years in 2020, according to Redfin's analysis of U.S. Census Bureau data.

The analysis also showed that millennials are more likely to stay at home for a shorter period of time, partly because they change jobs more often than older generations.

Two in five baby boomers (born between 1946 and 1964) have lived in their home for twenty years or more.

By comparison, fewer than 7 percent of millennials – born between 1981 and 1996 – have lived in their home for ten years or more.

The report notes: “Most – 54 percent – ​​of baby boomers who own homes own them for free and with no outstanding mortgage.

“For that group, the average monthly cost of owning a home – including insurance and property taxes, among other things – is just over $600.

“Almost all boomers who do have a mortgage have a much lower interest rate than if they were to sell and buy a new home with the current interest rate of 7 percent.”

But researchers noted that older homeowners who are “hanging on to their homes” are “posing a barrier to young first-time buyers trying to enter the market.”

The findings echo comments made by Whitney, an analyst who was dubbed the “Oracle of Wall Street” after she accurately predicted the 2008 financial crisis.

Her research shows that approximately 90 percent of the housing stock is owned by people over 40, while 74 percent is owned by people over 50.

However, she claims a significant upheaval is afoot as more of these older owners begin to sell, freeing up inventory and driving down prices.

Whitney told DailyMail.com: 'It makes sense that many of these owners will be downsizing over the next decade. That's almost 35 million homes; it's a huge number that has to go through the system.

“My advice to homeowners is, if you want to sell, it's better to do it sooner rather than later.”

During the pandemic, the median U.S. home price rose from $303,465 in March 2020 to $402,045 in December 2023, according to Redfin data.

Many families were caught up in a so-called 'race for space' as they looked for larger homes and gardens in which to spend the lockdown. A widespread shift to working from home has also separated workers from their city center properties.

But home prices have remained high since then, despite mortgage rates soaring in response to Federal Reserve interest rates hitting a 22-year high.

The average interest rate on a 30-year mortgage currently hovers at 6.77 – about double what they were two years ago, according to figures from government-backed lender Freddie Mac.

In a normal market, this would be sufficient to dampen demand for housing and thus keep prices down. However, several experts have noted that a widespread housing shortage in the US has kept home values ​​artificially high.

Whitney emphasizes that there will not be a 'crash' in house prices, but rather an overdue correction.

And some markets will do much better than others.

She said: “Every sixty years, from an economic perspective, we see a similar kind of seismic shift in the American economy.

“Today we see companies shifting to tax-friendly states across the Sunbelt and in Texas, Tennessee and North Carolina. These are the housing markets where growth will continue.

Whitney emphasizes that there will not be a 'crash' in house prices, but rather an overdue correction.

She notes that homeowners have built $21 trillion in equity in their homes over the past decade. So a price drop is unlikely to seriously harm them.

And some markets will do much better than others.

She said: “Every sixty years, from an economic perspective, we see a similar kind of seismic shift in the American economy.

“Today we see companies shifting to tax-friendly states across the Sunbelt and in Texas, Tennessee and North Carolina. These are the housing markets where growth will continue.

• The S&P 500 Index ended above 5,000 for the first time on Friday
• Investors trust artificial intelligence that interest rate hikes by the Fed are on the way

By Neirin Gray Desai Consumer reporter for Dailymail.Com

Updated: 4:59 PM EST, February 9, 2024

• There were 8% fewer pending home sales last month compared to last year
• Mortgage rates have fallen from record highs, but borrowing is still expensive
• Home touring activity is on the rise, up 16 percent since January 1

By Neirin Gray Desai Consumer reporter for Dailymail.Com

Updated: 1:33 PM EST, February 9, 2024

Americans are starting to feel happier about the economy for the first time in two years, thanks to increasing affordability of eggs, gas and growth in their savings.

Optimism about the U.S. economy rose 10 percent this month, according to the University of Michigan's consumer sentiment index, which examines people's attitudes about their personal finances and spending.

It was the largest monthly increase since 2005 and puts the measure at the highest level since July 2021.

Thereafter, pandemic-era inflation increased and by June 2022, economic optimism had fallen to an all-time low.

“That was entirely due to the increase in inflation, the increase in gas prices and the dominance of inflation on people's economic lives,” said Joanne Hsu, director of research at the university. 'High prices are people's top priority.'

But finally, Americans appear to be experiencing relief after a series of unprecedented rate hikes by the Federal Reserve appear to have kept inflation in check for the time being.

“The most important thing in December and January over the past few months is that consumers are finally confident that the slowdown in inflation is continuing and will continue to slow in the coming months,” Hsu said.

The recent boost corresponds with significant improvements in the affordability of everyday items such as eggs, milk and gasoline. Many household items are even cheaper than a whole year ago.

According to the U.S. Bureau of Labor Statistics, a dozen eggs cost $4.25 last January. In January they were more than 41 percent cheaper, at $2.51.

Meanwhile, a liter of milk is now 20 cents cheaper than last year, when the price was $4.21. Gas also fell more than 7 percent over the year, costing $3.20 per gallon in January, according to the U.S. Energy Information Administration.

According to Hsu, the price of such items determines how people feel. “Every home will consume food and even people who don't drive or pump gas will see gas prices on the street,” she said.

Moreover, savers with money in their 401(K)s will have benefited from a gain of more than 20 percent for the S&P 500.

While the slightly higher unemployment rate of 0.2 percent may mean a greater number of people are looking for jobs, it could also help reduce inflation by reducing the amount consumers can spend.

Consumer spending is critical to the state of the economy because it makes up about two-thirds of GDP. When people have more money to spend, there is greater demand for products and the costs of those products rise.

“Consumers are truly the backbone of our economy,” Hsu says.

Although inflation is on its way down, sentiment is still 7 percent below the historical average and will not rise again overnight, Hsu warned.

“People react very, very quickly to a rise in inflation, and much more slowly to disinflation,” she said.

Although a much larger share of Americans now believe that good economic times lie ahead, many are still not so sure.

“Consumer confidence is a lot better than in 2022, but still not great,” Hsu said. “Forty-eight percent of people still expect challenging times in the coming economy and 41 percent expect good times,” she added.

“Consumers are still very divided on the trajectory of the economy, it's just a huge improvement over everyone agreeing we're headed for bad times.”

Taylor Swift is redefining what it is to be a success in the music industry – and changing the travel industry at the same time.

Last year, the American leg of her Eras tour strengthened the economy in the United States by at least $10 billion (£8.6 billion)This is reported by the American travel organization. The “Taylor Swift Effect” was cited in the Federal Reserve Bank of Philadelphia's annual report as a growth factor for local economies in the cities she visited.

Swift is now at the forefront of 'tour tourism' – a fast-growing trend where holidaymakers choose their destination based on attending a performance there.

And it's big business. During the US leg of Swift's tour, hotels in the cities where she played reported record occupancy rates. But those hotels were not only full, they had also planned it.

Travel analysis agency Lighthouse aggregated data across 13 tour stops in North America, and found Hotel room rates saw an average increase of 7.7 percent compared to the month prior to the tour dates. This increase occurred throughout the month, with Swift playing only two to three nights, suggesting that concert attendance is linked to people taking mini breaks.

It is a conclusion that is confirmed by travel and hospitality data analysts Rate gainwhich stated that destinations on the US tour experienced a 'long-tail effect' around concert dates: people used the performance as a pivot around which they planned a 'Swiftcation', staying a week or two beyond the date Swift played.

These pilgrimages to see Swift are representative of a growing trend. In a November 2023 survey Expedia.com passed over tourism tourism70 percent of respondents said they would travel outside their hometown to attend a concert more often than ever.

Expedia says touring tourism is on the rise due to numerous factors, from post-pandemic enthusiasm for travel, consumers' appetite to attend large-scale performances again and, in Swift's case, an unusually dedicated fan base willing to to go the extra mile to see her, given how elusive Eras tickets are (an analysis of TicketMaster data concluded that those trying to score a ticket had a 1 in 25 chance).

In 2024, Swift will take her Eras Tour to both Europe and Australia.

Evidence is already mounting that the record-breaking tour is inspiring vacation plans in Europe.

According to Opodo, searches for travel to cities during the dates of the Swift concerts increased by a wide margin compared to searches for the same cities the year before. 'Search queries [for travel to] Stockholm has increased almost fivefold year on year (473%) [the dates Swift is playing]', reports Opodo.

Searches for trips to Warsaw are up 339 percent from her August tour dates compared to the same period in 2023, while searches for trips to Edinburgh and Liverpool from June 7 to 15 have grown by 176 percent and 133 percent respectively.

Opodo also reports significant spikes in searches for Zurich, Lyon, Milan, Amsterdam and Vienna.

It is striking that the Eras tour, despite 53 dates in the US in 2023, continues to attract Americans abroad. According to Opodo, “American travelers worldwide lead the board for the most searches for concert dates to Paris, Madrid, Dublin, Amsterdam, Zurich, Hamburg and London.”

Most impressively, Opodo suggests that Australians are willing to make a long Taylor Swift pilgrimage: Their foray into travel suggests they'd rather go to London than any other Swift tour destination.

They could be Aussies looking to take the trip of a lifetime, using Swift as an excuse. Or it may be a more cost-effective trip than seeing her closer to home.

Australian hotel prices are already rising for Swift's playing period, with hotel prices in Melbourne and Sydney rising to more than AUS$1,000 (£785) per night, while a hostel in Sydney Central charges AUS$565 (£482) for one night. private room on the night of her performance.

Smart travel companies are aware of how far (literally) people are willing to go to see Swift and help music lovers plan their vacation. Based in London Contikia company specializing in social travel for 18 to 35 year olds, is aiming directly at the tour tourism market during the European leg of Swift's Eras Tour.

The 'Taylor Your Itinerary 2024' is a promotion selling five trips tied to Eras concert dates in four European cities. The trips feature Swift-inspired itineraries and, funnily enough, the company has offered a 13 percent discount (13 is Taylor Swift's favorite number) to Eras Tour ticket holders who book a trip longer than two weeks.

And for those traveling Swifties who worry they'll be bereft when the Eras Tour finally ends, there's a salve: a four-day Swift-themed cruise will depart from the Port of Miami in October 2024, the day after Swift performs her last show in the city.

By Daniel Jones, consumer editor for Dailymail.Com and Ap and Reuters

Updated: 09:54 EST, January 26, 2024

By Tilly Armstrong Consumer Reporter for Dailymail.Com

Published: 12:08 EST, January 25, 2024 | Updated: 12:08 EST, January 25, 2024

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For anyone planning a trip to the US in the coming months, the sudden and substantial rise in the Australian dollar will be welcome news.

Against the US dollar, our currency added almost 5 percent in November, its largest monthly gain in 2023, to buy about 66.20 US cents.

On Tuesday, the Australian dollar hit its highest level since late July, briefly reaching US67c in offshore trading before easing further.

While local factors play a role in the Australian currency’s recent appreciation, the main reason for the dollar’s jump can be attributed to the dollar’s decline, rather than domestic conditions.

Measuring the U.S. dollar against a basket of foreign currencies weighted by trade partnership, the dollar has fallen more than 3 percent this month and is at its lowest level in three months.

The measure, known as the DXY, fell half a percent on Tuesday as Federal Reserve Governor Christopher Waller added his voice to the growing number of policymakers who appear increasingly comfortable with the path the Fed has taken .

The US has made great progress in curbing price pressures. While US inflation peaked at 9.1 percent in June last year, it has fallen to just 3.2 percent in October and appears on track to meet the Fed’s 2 percent target.

Mr Waller, who has clearly been on the “hawkish” side of the spectrum within the Fed’s board – meaning he has regularly voted for a rate hike – said further rate hikes would make no sense if prices continue to fall.

“I am increasingly confident that policy is currently well positioned to slow the economy and bring inflation back to 2 percent,” Waller said.

“I’m encouraged by what we’ve learned in recent weeks: Something seems to be giving, and that’s the pace of the economy.”

Mr Waller added that if inflation continues to fall, there could be room to cut rates within three to five months.

The futures markets now show that interest rate cuts will be priced in as early as May next year.

At home, our inflation story is quite different.

Locally, our Reserve Bank still signals a chance of further interest rate increases in the coming months. While money markets are pricing in a 5 percent chance of a rate hike when the central bank meets on December 5, there is still a two-in-five chance that rates will be tightened further in March.

Just as importantly, investors don’t expect interest rate cuts until September 2024.

The RBA added a further 25 basis points to the official cash rate in November, while the Fed has not raised rates since July.

It is this difference in interest rate prospects between Australia and the US that is making our local currency more attractive, increasing demand and driving up its value.

Commodity prices explosive

Rising prices for Australian commodity exports have also helped push the Australian dollar higher.

In hopes of a new round of stimulus from Beijing to revive China’s troubled economy, iron ore prices are hovering around record highs of $130 per tonne.

Higher prices for our commodity exports mean more Australian dollars are needed to buy the same amount of them, increasing demand and increasing the value of the local currency.

And with analysts predicting that iron ore could rise towards $150 per tonne in the new year, the impact on the dollar could only become stronger.

What does a strong Australian dollar mean for us?

For Australians who don’t fly to the US, the strong Australian dollar will reduce the cost of goods and services brought in from overseas.

As households face painful pressures as their real incomes are squeezed, lower import prices will bring much-needed relief into their pockets.

Similarly, companies that rely on imports from abroad will also face lower costs to purchase products.

But it’s not all good news.

For Australian businesses that export or sell their goods and services overseas, the news isn’t great. The strong exchange rate poses challenges as it reduces their competitive advantage, making it more difficult to price their products competitively in foreign markets.

In addition, companies may receive their earnings in weaker foreign currencies, reducing their revenues.