From higher fuel costs eating deep into airline profits, to a job market that is showing signs of cooling, inflation continues to be the headliner in global financial news.
The rise in consumer prices has left over 70% of Americans stressed about their personal finances. As well, unmarried couples are pairing up to buy homes as mortgage rates hit record highs.
Here’s a rundown of some of the major financial news that caught our radar this week.
Higher fuel costs eat into airlines’ profits.
Rising jet fuel prices are putting downward pressure on Airline profits.
United Airlines said it expects third-quarter fuel costs between $2.95 and $3.05 a gallon, a rise from a per-gallon range of $2.50 and $2.80, back in July when the airline gave its third-quarter guidance. Southwest Airlines also said fuel prices would be higher than previously forecast.
Jet fuel prices have increased 24% since the start of the industry’s second-quarter earnings season. The development has sparked a reaction from Wall Street. On Tuesday, Bank of America analysts cut price targets across the industry, citing the high prices.
Apple faces new threat in China
Apple faces a new sales threat in China after Beijing ordered government officials not to use iPhones for work or bring them into the office.
There are speculations that the ban might be extended to state-owned enterprises and other government-backed entities.
The policy is part of the Chinese government’s plan to reduce its reliance on foreign technology. Apple is facing steep competition from Chinese tech company, Huawei. They launched two new smartphones – the foldable Mate X5 and the Mate 60 Pro+ .
Both products have drawn global attention for showing resilience despite U.S. sanctions.
The reported ban caused Apple’s stock price to fall, costing the company about $200 billion in market value.
Job market boom is over
It appears that the labor market boom is over.
Increasing numbers of workers, including women, immigrants, and Americans with disabilities, are entering the workforce, enabling businesses to fill vacant positions.
Providers of professional and business services have drastically reduced their job postings. This includes many white-collar positions in accounting, law, and consulting.
In the past year and a half, restaurants, hospitals, and nursing homes, which struggled to staff up in the aftermath of the pandemic, have reported fewer job openings. These companies were able to re-fill positions they eliminated at the onset of the pandemic because more people began searching for work.
Exodus of Binance executives continues
Several executives have left Binance in recent days, including leaders overseeing its Russian business and its connections to the traditional financial system, extending a period of rapid senior turnover at the cryptocurrency giant.
The world’s largest crypto exchange has faced intense regulatory scrutiny this year. The latest departures, including those of regional head Gleb Kostarev and Russian chief Vladimir Smerkis, follow exits by its general counsel, chief strategy officer, and head of investigations in recent months.
Binance has also laid off staff and cut back benefits.
Homebuyers pay record-high mortgage rates
Mortgage payments have hit the highest levels on record, as house affordability reaches its lowest point in nearly four decades.
In July, the average monthly principal and interest payment for a 30-year fixed-rate mortgage was $2,306 – $871 more than it was just two years ago.
51% of July homebuyers are paying $2,000 or more per month, up from 18% two years ago. In addition, 23% of new homeowners had payments exceeding $3,000, compared to 5% in 2021.
The numbers point to how difficult it has become for buyers, particularly those at entry level. And that relief may be far off as long as mortgage rates continue to rise in tandem with housing costs.
More unmarried couples are buying homes together
Joint home ownership is one of the many financial reasons why young, single couples live together.
A growing number of couples are buying a property prior to getting married, based on a National Association of Realtors report from 2022. Compared to just 4% in 1985, unmarried couples now account for 18% of all first-time homebuyers.
Numerous people have been compelled to pool their resources with their partners in the attempt to locate cheap homes. There is strength in numbers that a pair offers when it comes to financing eligibility, given the continued high cost of real estate and interest rates.
Americans are stressed about their personal finances
74% of Americans are stressed about personal finances, and many are split on the value potential of 401(k) contributions. This is up from 70% in April of this year. 37% of the 4,300 adults taking part in the survey in August this year indicated that they are ‘very stressed’.
The top stress factors include inflation, interest rates, and a lack of savings.
41% of people surveyed stated that they do not contribute to a 401(k) savings account. Out of this, only 8% have automated savings, while 11% put away the maximum employee contribution. 56% also admit that they are not on track with their savings to retire comfortably.