- Today's Scoop:
Hey friend - Make sure to catch up with our Weekly Scoop, and don’t miss our Explained about whether the government is mismanaging our tax dollars.
Here’s what you need to know today…
Flight tickets are getting cheaper.
Americans aren’t as worried about inflation.
Companies don’t expect to hire as many seasonal workers for the holidays.
The Market: ⬇️ -0.1%
S&P 500: 4,411.55
1Mo: +1% | 1Yr: +11% | 5Yr: +62%
The market drifted sideways today as investors braced for tomorrow's critical inflation report. Any surprise increase in inflation is likely to raise concerns about policymakers increasing borrowing costs.[🤓]
Air travel is getting cheaper for Americans. As airlines scramble to fill up to 260 million seats in the fourth quarter, companies like Southwest are offering tickets for as low as $29 at off-peak travel times. After the pandemic, eager travelers took trips at more random times. As schedules returned to normal, airlines have lowered fares to fill in the gaps. The dip in fares may not last, as many airlines face increased fuel and labor costs.
Consumers don’t expect inflation to return to how it was anytime soon. The Federal Reserve’s monthly survey indicated that consumers expect living costs to rise by 3.6% over the next year and 3% annually over the next three years. That’s lower than the hefty price spikes in the past few years but far from the 1-2% annual inflation policymakers want to see. Expectations matter because they can be self-fulfilling, as consumers spend more and businesses raise prices in anticipation of higher costs.
There won’t be as much temporary work available this season. According to outplacement-services firm Challenger, Gray & Christmas, the number of seasonal jobs advertised this fall dropped to the lowest level in 10 years. Transportation companies, warehouses, and retail stores have cut back on short-term hiring in anticipation of lower consumer spending this holiday season. Retailers may have current part-time employees work more hours to meet demand.
How are you feeling about the economy?
Company Scoops 🗣️🌎💰
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Inside Scoop 🤓
Who’s in charge of controlling inflation?
The Federal Reserve, aka the Central Bank, aka The Fed, is in charge of our whole money system. When the economy is struggling, the Fed lowers baseline interest rates to make it cheaper for consumers and businesses to borrow and spend (lower rates on business loans, mortgages, credit cards, car leases, etc.)
The Fed also pumps more money into the system by buying bonds with new dollars that it essentially speaks into existence. The additional cash keeps the pipes flowing as the borrowing and spending heats up, stimulating economic activity.
Once the economy's strong enough to stand on its own, the Fed starts to raise interest rates and pull back some of that money to ensure the economy doesn't overheat. Inflation is the Fed's heat gauge. The gauge was reading very hot but has been cooling lately.
So everyone's watching how long the Fed will keep restricting the economy with high rates if inflation keeps cooling. The Fed hopes to get living costs under control without sparking mass unemployment.