Today's Scoop:

Hey friends - hope you had a great weekend. Make sure to catch up with our Weekly Scoop, and don’t miss our Explained about the immense influence of four financial companies on the entire economy.

Here’s what you need to know today…

1. Americans racked up credit card debt this summer.

2. Households feel less optimistic about their financial situations.

3. Consumers believe inflation will be sticking around.

S&P 500: 4,487.46
1Mo: -1% | 1Yr: +9% | 5Yr: +55%

The market drifted higher today without a significant news driver. Investors are waiting for the inflation report on Wednesday.

Americans swiped their credit cards more than usual this summer. The Federal Reserve reported consumer debt rose by $10B in July, driven mainly by credit card purchases. Higher living costs have eaten away at families’ excess savings. Overall, credit levels aren’t rising much faster than in a normal economy, and missed bill payments haven’t yet grown to a concerning level.

Households aren’t as optimistic about their financial future. The New York Fed’s survey of consumer expectations showed people are growing more concerned than they have been in years about layoffs and not being able to find a job. Americans have less hope for higher wages and expect to cut back spending.

Consumers don’t anticipate inflation returning to the way it was anytime soon. The Fed’s survey indicated consumers expect living costs to rise by 3.6% over the next year and increase by 3% annually for the next five years. That’s lower than the dramatic price tag spikes of the past year but far from the 1-2% annual inflation before the pandemic. Expectations are important because they can be self-fulfilling, as consumers spend more and businesses raise prices in anticipation of higher costs.

Click to dig in & vote your reaction, see how others feel

• Walmart reduces starting wages for store workers

• Intuit’s TurboTax found to use deceptive marketing to hide costs

• Chevron gives up negotiations and tries legal action to stop strikes

• General Motors insults union with weak offer, faces looming strike

• JM Smucker buys Hostess for $3.6B [🤓]

(These links only work for 24 hours while the story is live)

How do mergers and buyouts work?

Mergers and acquisitions are a core component of corporate expansion and development. When a company wants to expand into a new market or absorb new resources that another company has, it'll typically hire an investment bank (like a real estate broker, but for companies) to help identify, value, and negotiate a deal with the target company.

The acquiring company may take on debt to fund the deal, trade its stock, or use its cash reserves. The acquisition can be an all-cash deal, where shareholders receive cash in their brokerage accounts, or an all-stock deal, where your shares of Company X turn into some amount of shares of Company Y, or some mixed combination of the two.

Use our vetted resources to level up your financial wellness. View & compare more tools.

Higher Living Costs & Tighter Budgets: Make sure to avoid debt by tracking your spending, building savings, and spending carefully. We use Guac to save while spending and get cash back on 200+ brands.