Money Rehab with Nicole Lapin - Prices Have Been on the Rise— Here's What To Expect

Episode Date: April 12, 2023

It's time for our weekly vibe check on the economy, and today we're getting nerdy. Nicole breaks down recent unemployment numbers, consumer confidence numbers and inflation numbers to tell the bigger story of what you (and your wallet) can expect in the coming months.

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. I'm Nicole Lappin, the only financial expert you don't need a it's time for some money rehab. Okay, it is time to do a vibe check of the economy because it has been all over the place. I mean, a month ago, banks were collapsing and people were seriously concerned that it would trigger a massive global recession. But the Dow, the Nasdaq, and the S&P 500 indexes are actually all up year to date. So year to date since January. Even Bitcoin is up. The economy, of course, is more than just the stock market. So let's take a quick peek at

inflation, the jobs market, and the general vibe of the economy. So first up, inflation. A week or so after SVV collapsed, the Fed met, and there was a lot of speculation that the Fed chair, Jay Powell, would hold off on raising rates again in the face of a very scary economic moment. The argument at the time was that the fear created by the bank collapse would have deflationary impacts all of its own. But J-PAL went hard and raised rates again. The March CPI numbers are dropping the very same day I'm putting out this podcast, so I can't tell you exactly what they'll be, but we do have numbers from February, and they were exactly as expected. Inflation is still increasing, but at a slower rate, which made everyone feel a little more comfortable about

the whole situation. Unfortunately, people still think that things are really expensive. Generally speaking, polls show that people are more worried about inflation recently than they have been for the last few months. So this isn't great because a lot of the economy just runs on vibes. And if folks are worried, they act differently and they spend differently than if they are confident. But this fear isn't totally unfounded. And it's not just people who are noticing price increases again. The Saudis and some of their partners have announced that they're cutting oil production, which will most likely result in higher fuel costs. Fuel costs factor heavily into pricing. And a key factor in those pretty good inflation numbers for February was that at the time, fuel costs were falling. No amount of interest rate hikes can really overcome that. not universes. They don't expand forever. They aren't puppies who grow and then stop growing when they become a dog. Economies are more like plants. They have seasons of growth and seasons

when they're dormant. You can think of COVID as someone doing a hard prune on a plant, everything shrank, and then rapidly expanded with new growth. But plants and economies need to pull back a little after a rapid expansion, and that is normal and healthy. Unfortunately, recessions are just part of the economic cycle, just like a tree is going to lose its leaves once a year. The trick is managing an economy so that those pullbacks aren't devastating. Because while recessions can be normal and actually even healthy in that they can help restore balance to our economy, they can also really suck. One of the ways they can devastate families and even communities is when there's a widespread

loss of jobs. Since this fall, we have watched the tech industry lay off thousands and thousands of people, sometimes from a single company. Amazon is in the process of laying off 27,000 people in the last six months. And when you see those headlines, it feels so scary. But so far, the job market outside of tech has held steady. The numbers for March are safe and kind of boring, which is kind of what we want. Unemployment dropped slightly, so from those numbers, it looks like people are okay. And finally, what is the vibe out there? You know I am a nerd, so let's get actual vibe numbers, shall we? And take a look at the U.S. Consumer Confidence Board's numbers and the University of Michigan's Survey of Consumers. This is feels but with

numbers. The University of Michigan report has people feeling like the economy is going to get worse, but the consumer confidence numbers have people feeling slightly more confident about things. So there you go. The vibe is undecided. And this might just be how we live for a while, feeling uncertain but with solid numbers, even when we go through rough spots like we did with the banks last month. Try not to let the noise get to you. There are times of economic pullback. There always have been. There always will be. But they end. They always have. For today's tip, you can take straight to the bank. With interest rates going up and all the uncertainty surrounding banking right now, it's getting harder and harder to get credit. So your

credit score is even more important. I know it seems counterintuitive, but if you have a credit card that you've paid off, don't cancel it. Your debt to credit ratio is a big part of your credit score. So having more credit than you're using actually makes you look good and keeps those numbers up. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.

And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.