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Student debt rose to $1.6 trillion
Student loan borrowers spent the first half of the year hoping to see their balances reduced, if not erased, by the end of the summer. Many spent the second half of the year scrambling to figure out how they were going to resume making payments.
By the end of the third quarter, borrowers wound up with a total of $1.6 trillion in debt, according to New York Fed data. September marked the first month federal student loans would accrue interest since 2020, and borrowers had to resume payments in October.
Though President Joe Biden’s effort to relieve up to $20,000 per borrower was blocked by the Supreme Court in June, his administration has still granted forgiveness to 3.6 million Americans through improvements to Public Service Loan Forgiveness, income-driven repayment and disability discharge programs.
Mortgage rates hit 8%
When average rates on 30-year fixed-rate mortgages hit 8% in October, those already exhausted with the state of the housing market may have seen their stress hit new levels, too. The national average hasn’t hit 8% since 2000.
Just three years earlier, in October 2020, rates were sitting comfortably below 3%. But as inflation rose throughout 2021 and 2022, the Fed stepped in to tame it by increasing its target rate, driving up the cost to borrow money.
As inflation slowed, the Fed was able to pause its rate hikes and as of November, mortgage rates have crept back down below 7%. Though mortgage rates and home prices remain higher than what many would-be buyers would like to see, rates could continue to come down next year, as the Fed is expected to start cutting.
Inflation cooled to 3.1%
The 12-month consumer price index, which tracks the change in prices across all items, continued to fall nearly every month through 2023, landing at 3.1% in November. It’s not quite at the Fed’s target of about 2% yet, but it is down from 6.4% in January of this year, according to the U.S. Bureau of Labor Statistics.
While they’re not rising as quickly as in 2022, prices on everyday items from groceries to gas remained high through 2023.
Credit card debt hit $1.08 trillion
Unemployment rate hovered around 3.6%
Household wealth grew 37%
Do you feel wealthier than you were before the Covid-19 pandemic began? The median American household’s net worth grew 37% between 2019 and 2022, the latest Survey of Consumer Finances conducted by the Federal Reserve found.
The survey, which is conducted every three years, found the median net worth among all U.S. households hit $192,900 in 2022, up from $141,100 in 2019.
The average net worth among U.S. households rose to $1.06 million in 2022, up from $868,000 in 2019, the survey found. Keep in mind that average net worth can be skewed by ultra-wealthy households, which are few in numbers but rich in assets. The richest 1% of Americans own 23% of the country’s household wealth, according to Fed data.
Tech industry lays off more than 250,000 workers
It has been a tumultuous year for the tech industry, which has shed 260,509 jobs as of Dec. 22, according to tracking website Layoffs.fyi. That’s nearly 100,000 more layoffs than all of 2022, the website reports.
The 1,175 companies that laid off employees throughout the year include tech giants such as Amazon, Meta and Microsoft.
The Fed’s interest rate hikes and fears of a coming recession have made the industry especially susceptible to cuts after years of nearly untethered growth.
It’s not all bad news for tech, however. The explosion of artificial intelligence led to a 1,000% year-over-year increase in related job postings on work marketplace Upwork.
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