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The consumer price index rose 3.2% in July from 12 months earlier, the U.S. Bureau of Labor Statistics reported.
While the annual rate for headline inflation was below expectations, it marked an increase from 3% in June.
Nearly all of the monthly inflation increase came from shelter costs, which increased by 0.4% and were up 7.7% compared with one year ago.
And experts say “jumping oil prices” are a threat to reaching the Federal Reserve’s 2% inflation target.

Grocery items are offered for sale at a supermarket on August 09, 2023 in Chicago, Illinois. 
Scott Olson | Getty Images

Annual inflation rose slower than expected in July, a welcome sign for consumers who have been grappling with high costs. But many Americans are still feeling the sting of essential expenses such as shelter and energy.   
The consumer price index rose 0.2% for the month and 3.2% from one year ago, according to the U.S. Bureau of Labor Statistics. While the annual rate for inflation was below expectations, it marked an increase from 3% in June. 

July’s CPI report was “better than we were expecting,” said Eugenio Aleman, chief economist at Raymond James. But the biggest issue is “shelter costs continue to remain strong.”
The CPI is a key gauge of inflation, measuring the average price changes over time for goods and services. While July’s annual inflation was higher than June’s, it’s still a sizable drop from the 8.5% reading one year ago.

Nearly all of the monthly inflation increase came from shelter costs, which increased by 0.4% and were up 7.7% compared with one year ago. “We have been expecting shelter costs to start weakening considerably,” Aleman said. “But it hasn’t happened.” 
Despite rising oil costs, energy prices increased just 0.1% in July and food increased 0.2%, according to the bureau. However, there was relief for used vehicle prices, which dropped by 1.3%, and medical care services, which were down 0.4%. “That was very good news for consumers,” Aleman said.

‘Jumping oil prices’ is a threat to inflation target

“Inflation is moderating and headed in the right direction,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s still too high for the Federal Reserve’s comfort, but quickly moving toward its target.”

The Fed approved another interest rate hike in July, still aiming for its 2% inflation target. But the central bank may be reaching the end of its rate-hiking cycle, some officials say.   
“If everything roughly sticks to script, inflation will be back to the Fed’s target by this time next year,” Zandi said. 
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He said the most serious and immediate threat is higher oil prices, which have increased over the past month or two. But with numerous “unpredictable geopolitical factors,” future oil prices can be difficult to predict, he said. 
“Nothing is more vexing, more pernicious than jumping oil prices,” Zandi said.
With elevated oil prices, the next CPI report before the September Fed meeting “probably won’t look good unless shelter costs start plunging,” Aleman added.

Millions of households are ‘stretched financially’

Despite falling inflation, many Americans are still feeling the pinch of higher prices. 
“It’s hit hardest and most consistently in categories that are necessities,” said Greg McBride, chief financial analyst at Bankrate, noting that millions of U.S. households are still feeling “stretched financially.”  
Some of the essential monthly expenses such as shelter, electricity and motor vehicle costs continue to strain budgets, he said.

It’s hit hardest and most consistently in categories that are necessities.

Greg McBride
Chief financial analyst at Bankrate

“There really hasn’t been anywhere to hide,” McBride added.     
As a result, savings balances have declined and credit card balances are up, he said. Those credit card balances also become harder to pay off amid rising interest rates. Indeed, aggregate credit card balances surpassed $1 trillion for the first time in history, the New York Federal Reserve reported Tuesday.
However, the strong labor market could offer a chance for a side job that could help people improve their household budget and start paying off debt, McBride said. More

As Americans increasingly lean on credit to make ends meet, new reports show some signs of potential problems ahead.
Total credit card debt reached a record $1 trillion in the latest quarter, the Federal Reserve Bank of New York reported Tuesday.
The average balance rose to $5,947, the highest in 10 years, a separate report by TransUnion found.
Still, there are opportunities out there for cardholders that will provide a “tailwind on a path to debt repayment,” one expert says.

For some, high-rate debt is ‘their only option’

Rising balances may present challenges for some borrowers, particularly when student loan payments resume this fall, the New York Fed researchers said.
“We also can’t discount the importance of higher interest rates on the costs of borrowing for households,” said John Sedunov, associate professor of finance at Villanova University’s School of Business. “Not only are goods and services more expensive, but so is money.”

On the heels of another rate hike last month by the Federal Reserve, the average credit card rate is now more than 20% on average, an all-time high.

People aren’t financing purchases at 20% because they have other options.

Greg McBride
chief financial analyst at Bankrate

At nearly 20%, if you made minimum payments toward this average credit card balance, it would take you more than 17 years to pay off the debt and cost you more than $8,366 in interest, Bankrate calculated.
“People aren’t financing purchases at 20% because they have other options,” said Greg McBride, chief financial analyst at Bankrate. “They’re doing that because it’s their only option.”
Factor in a personal savings rate that was hovering around 4.3% in June — well below a decades-long average of roughly 8.9% — “I think it is painting a picture of an economy in which inflation has taken its toll on households,” Sedunov said.
Overall, an additional 19 million new credit accounts were opened in the latest quarter, boosted in part by originations among Gen Z, or adults ages 18 to 25, gaining access to credit cards. The tally of total credit cards hit a record 530.6 million, TransUnion also found.
“Like the overall population, many Gen Z borrowers are facing the same financial challenges brought on by high interest rates and inflation,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion. “As a result, they are tapping into these available credit products to help them cope with rising expenses.”
As the number of credit card accounts in the U.S. rose, delinquencies notched higher, the report said. TransUnion defines a delinquency as a payment that’s 90 days or more overdue.
“The increase in delinquencies over the past several quarters is something to monitor,” Raneri added. Already, lenders have started to restrict access to less-experienced credit users, she said.

How to tackle high-interest credit card debt

krisanapong detraphiphat | Moment | Getty Images

“It’s still a tremendous opportunity to grab a 0% balance transfer card,” McBride said. Cards offering 12, 15 or even 21 months with no interest on transferred balances are out there, he added, and “if you have credit card debt, that is your first step — to transfer that balance and give yourself a tailwind on a path to debt repayment.”
Borrowers may also be able to refinance into a lower-interest personal loan. Those rates have climbed recently, as well, but at 10%, on average, are still well below what you currently have on your credit card.
Otherwise, ask your card issuer for a lower annual percentage rate. In fact, 76% of people who asked for a lower interest rate on their credit card in the past year got one, according to a LendingTree report.
“The fact that card issuers are still willing to give breaks like that, even in the wake of a year of frequent rate hikes, is very, very good news for cardholders,” said Matt Schulz, chief credit analyst at LendingTree.
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Workers who go on strike generally don’t qualify for unemployment benefits. But two states — New York and New Jersey — are the exception to that rule.
Other states could soon join them.

Rep. Greg Casar, D-Texas, speaks during a Vigil and Thirst Strike for Workers’ Rights on the House steps of the U.S. Capitol on July 25, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images

Workers who go on strike generally don’t qualify for unemployment benefits. But two states — New York and New Jersey — are the exception to that rule, and other states could soon join them.
The push to provide unemployment insurance to those who walk off the job in protest is picking up amid what has become known as the “summer of strikes.”

More than 200 strikes involving around 320,000 workers have occurred across the U.S. so far in 2023, compared with 116 strikes and 27,000 workers over the same period in 2021, according to data from the Cornell ILR School Labor Action Tracker. Worker activism rose during the coronavirus pandemic, and a tight labor market has given employees more power to negotiate.
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“These are public benefits that should be there for workers when their workplace is so unsatisfactory that they take the extraordinary step to go on strike,” said Michele Evermore, a senior fellow at The Century Foundation. “They need support just like any other worker.”
Critics of the aid say it puts employers at a disadvantage during negotiations and encourages workers to go on strike.
Here’s what to know about access to unemployment benefits for striking workers.

New York

New York has offered some form of jobless benefits to striking workers since before the unemployment insurance was even written into federal law, Evermore said.
What’s more, in 2020, state lawmakers dramatically reduced the amount of time an employee has to be on strike before they can begin collecting unemployment, from seven weeks to 14 days.
Workers on strike in the Empire State can typically collect the benefits for as long as 26 weeks.

The state could require the aid to be repaid if a worker’s employer provides them with back pay when the strike is over, according to the New York State Department of Labor.
The department “remains committed to helping to ensure that impacted workers have access to the resources they are entitled to during trying times, including labor strikes,” it said.

New Jersey

Workers on strike in New Jersey may also qualify for unemployment benefits, and lawmakers recently shortened the waiting time for eligibility there, too, to 14 days, down from 30.
“These benefits are crucial to allow individuals going through this process the support they need to continue to take care of themselves and their families during difficult times,” New Jersey Gov. Phil Murphy said in a statement in April.
Workers in the state can usually collect unemployment benefits for up to 26 weeks.

Push picks up in Massachusetts, Connecticut

A bill is working its way through the Massachusetts Legislature that would offer unemployment benefits to those who have been on strike over a labor dispute for 30 days or more.
Lawmakers in Connecticut also recently pushed to provide jobless benefits to workers on strike, but they have so far been unsuccessful.

“To me, it’s an absurd notion on its face,” Rob Sampson, a Republican state senator in Connecticut, said at a committee hearing earlier this year. “People are voluntarily walking off the job.”
But many workers who go on strike don’t feel they had much other choice, Evermore said.
“Once your shop elects to strike, if you individually decide to break that strike line, you are undermining your self-interest and the interests of your whole union,” she said.
“This is not putting a thumb on the scale in negotiations,” Evermore added. “It is totally in keeping with the goals of unemployment insurance: to keep people who are out of work from desperation.” More

Overworking has resulted in 745,000 deaths from stroke and ischemic heart disease in 2016, according to a 2021 report by the World Health Organization and the International Labour Organization.
Author Manisha Thakor explores the causes and risks of constantly seeking for more in her new book, “MoneyZen: The Secret to Finding Your ‘Enough.'”

vchal | Getty Images

Between 2000 and 2016, long working hours led to a 42% increase in deaths from heart disease, and a 19% increase in deaths from stroke, according to a 2021 report from the World Health Organization and the International Labour Organization.
The bulk of 745,000 deaths in 2016 from such causes were among people between 60 and 79 years of age who had worked for 55 hours or more per week between the ages of 45 and 74.

In her new book, “MoneyZen: The Secret to Finding Your ‘Enough,'” author Manisha Thakor explores the reason why people fall into overworking themselves and the risks people face in the long run. Thakor, a certified financial planner and a chartered financial analyst who has an MBA from Harvard, wants to help people shed work addiction and “self-sabotaging beliefs and habits around money, careers [and] accomplishments.”
(This interview has been edited and condensed for clarity).
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Chasing money, prestige doesn’t ‘quench the need’

Ana Teresa Solá: What is the “never enough” mindset? Manisha Thakor: I define the “never enough” mindset as a feeling that no matter how many accomplishments you achieve or how much praise you receive, it just feels like it’s never enough. And you feel almost compelled in a subliminal, toxic way to keep chasing after these things. No matter how many of them you receive, it just doesn’t seem to quench the need.
ATS: Can you explain the Buddhist concept of the hungry ghosts and how it’s connected to the feeling of “never enough?”MT: It’s the notion that hungry ghosts walk amongst us and they are beings who are seeking love, a sense of belonging, to be seen for who they really are and appreciated for who they are, not what they do. In the traditional Buddhist’s description, these ghosts have big bellies because they’re starving with these things, but they have throats that are as small as a needle. No matter how much of these beautiful things are coming to them, in their daily lives, they’re not able to digest enough to fill their bellies.

I met an unprecedented number of people who are struggling with this kind of mindset. My argument is that it’s because people are experiencing the symptoms of a society that’s been built on this false belief that the answer to our collective angst is pursuing more money, work and more prestige. Those things turn us into hungry ghosts because they have no finish line — you can never get enough of them.

‘Increased income is not leading to life satisfaction’

ATS: How do working conditions in the U.S. perpetuate “never enough?”MT: Tremendously, and from a variety of different angles. We have a shocking number of people who are not earning a living wage. They range from individuals who are working two to three jobs at minimum wage and are utterly exhausted trying to provide for their families, struggling with the lack of social safety nets. And then we have another category of people who add enormous value to society — from teachers to medical frontline workers — who aren’t paid remotely compared to the value they bring to society.
The final rotten cherry on the top is the fact that as a society, we have come to so value each other based on what someone does. 

The overarching risk is that we end up, at the end of the day, looking back at our adult years and realizing we spent years as human ‘doings’ instead of thriving as human ‘beings.’

Manisha Thakor
Author of “MoneyZen: The Secret to Finding Your ‘Enough'”

ATS: You would say that work conditions have meshed into our lives so much that we become what we do?MT: Oh, absolutely, and it starts early. We ask young kids, “What do you want to be when you grow up?” We don’t mean “be” by your character. Be nice, be kind, be compassionate and be loving. We mean, “What do you want to do for a living?” That’s the lens and it starts from such a young age.
ATS: What are some of the risks we face if we overwork ourselves? MT: The overarching risk is that we end up, at the end of the day, looking back at our adult years and realizing we spent years as human “doings” instead of thriving as human “beings.” Another one is that your core relationships shut you down. My friends are my coworkers and they become my surrogate family.
But I think the biggest one is this pervasive sense of emptiness that just life isn’t fulfilling. You are working hard, you may be earning more, but that increased income is not leading to life satisfaction. 

‘Identify what’s on the other side of your self-worth’

ATS: You bring up significant data and anecdotes that highlight how overworking can lead to health issues. How can someone pivot their behavior before it’s too late?MT: Most of us are optimizing our lives for some kind of toxic equation. In my case, I literally believed that my self-worth equaled my net worth. A key start is to identify what’s on the other side of your self-worth. I want to introduce people to what I think is a much healthier framework to make decisions about the asset allocation of your scarce resources of time and money, to bring you to this place that I happen to call MoneyZen. 

ATS: What is MoneyZen? MT: It’s a term I coined over a decade ago and which I refer to as having calm confidence and clarity about both your relationship with money and the role you want money to play in your life. There’s not a specific number associated with it, it’s a state of mind. The steps to get there is a mental model of “financial health” plus “emotional wealth.”
ATS: What advice would you give to younger adults who are embarking on their early relationships with money and their careers? MT: Live within your means, generally speaking. Your life isn’t going to look like your friends around you because most people don’t live within their means.
That’s the core foundation of establishing good lifelong financial habits because once you learn that skill, you then can start being responsible with debt management, and perhaps being very aggressive with the payoff of that debt management. You also have money to set aside for an emergency fund, because we all know the one thing you can expect is the unexpected. And you also have some money to set aside for the future because we know about the power of compounding.
Those three things are the three-legged stool of financial health.  More

FA Playbook

After more than a year of gloomy forecasts for the U.S. economy, some experts have backed off recession predictions.
Strong labor numbers, falling inflation and other economic data may suggest the economy is heading for a soft landing, experts say.

Sollina Images | Tetra Images | Getty Images

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“The 2022 buzzword was recession,” said Douglas Boneparth, a certified financial planner based in New York. “And here we are in 2023 with a myriad of economic data suggesting otherwise.”
Boneparth, who is president of Bone Fide Wealth and a member of CNBC’s Financial Advisor Council, said data like the strong labor market and falling inflation isn’t pointing to the economic downturn experts predicted.
The U.S. Bureau of Labor Statistics reported annual inflation fell to 3% in June, and the July unemployment rate was 3.5%, just above the lowest level since 1969, according to the U.S. Labor Department.  
Of course, with recessions notoriously difficult to predict, even for economists, advisors have warned clients about making fear-based investing decisions.

Recession ‘highly unlikely’ in the next 12 months

One definition of a U.S. recession is two consecutive quarters of negative gross domestic product, or GDP, which happened during the first two quarters of 2022. Subsequent quarters have been positive.
But that 2022 slump hasn’t been called a recession by the National Bureau of Economic Research, the organization that marks the start and end of economic downturns, explained Atlanta-based CFP Ted Jenkin, founder of oXYGen Financial.
Plus, “wages are still growing and retail sales are still growing,” said Jenkin, who is also a member of CNBC’s FA Council. “The odds of a recession in the next 12 months are highly unlikely.”

The odds of a recession in the next 12 months are highly unlikely.

Ted Jenkin
Founder of oXYGen Financial

‘We constantly educate our clients’

Whether the economy is heading for a mild recession or soft landing, experts emphasize the need for ongoing client education.
“Sometimes we have recessions when you least expect it, and then you have booming economies when you least expect it,” said Carolyn McClanahan, a CFP and founder of Life Planning Partners in Jacksonville, Florida. She is also a member of CNBC’s FA Council.
“We constantly educate our clients and make them prepared for whatever the world’s going to throw their way,” she added. More

Companies that offer student loan assistance on top of remote work may be especially appealing to some people.
Outstanding student debt in the U.S. is estimated to be over $1.7 trillion, and more than 95% of people say they want some form of remote work.

Google headquarters is seen in Mountain View, California, United States on May 15, 2023.
Tayfun Coskun | Anadolu Agency | Getty Images

How student loan aid works as an employee benefit

Student loan assistance programs come in a number of forms, and the benefit’s value can vary widely. So it’s worth digging into the terms before you make it a deciding factor in your job hunt, experts say. Total outstanding student loan debt is estimated to be over $1.7 trillion.
More than three-quarters of people who have student loans or expect to take them out say they’d be more likely to accept a job with a lower salary if they received a student loan assistance benefit, a Fidelity survey recently found. The firm polled recent college graduates and current high school students.

“With very low unemployment rates, employers will be more willing to offer student loan assistance to attract and retain qualified employees,” said higher education expert Mark Kantrowitz. Although, he noted, a higher salary does allow workers to pay off their debt at a faster pace on their own.

An employer offer for loan assistance may be especially attractive given the Supreme Court’s recent ruling striking down President Joe Biden’s plan to cancel up to $20,000 in federal student debt. Biden said he’s pursuing a different path to try to cancel people’s debts, but the process could be lengthy and will likely be met with the same legal challenges as his first attempt.
Student loan bills are set to resume in October after being on pause for over three years.
SHRM, a group representing human resources professionals, called on Congress and state legislatures in June to establish bigger tax breaks for workplace education benefits.
Meanwhile, more than 95% of people say they want some form of remote work, according to a FlexJobs survey in May. More

Total credit card debt reached $1.03 trillion in the second quarter of 2023, according to the Federal Reserve Bank of New York.
Credit card balances have now notched seven consecutive quarters of year-over-year growth.
“The resumption of student loan payments will be a huge test for many cardholders,” says one expert.

Collectively, Americans now owe more than $1 trillion on credit cards.
Total credit card debt rose nearly 5%, or about $45 billion, in the second quarter to a new high of $1.03 trillion, according to a new report on household debt from the Federal Reserve Bank of New York.

Although delinquency rates are still low by historical standards, rising balances may present challenges for some borrowers going forward, particularly when student loan payments resume this fall, according to the New York Fed.
“The resumption of student loan payments will be a huge test for many cardholders, shrinking the amount they have to devote to paying off card debt and leaving some people simply unable to make minimum payments at all,” said Matt Schulz, LendingTree’s chief credit analyst.

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“One trillion dollars in credit card debt is staggering,” Schulz added. “Unfortunately, it is likely only going to keep growing from here.”

Card balances, interest rates have increased

After a sharp slowdown in 2020, credit card balances have grown year over year for the past seven quarters, largely due to strong consumer spending in the face of higher prices, the New York Fed researchers found.
“Credit card balances saw brisk growth in the second quarter,” Joelle Scally, regional economic principal in the New York Fed’s research and statistics group, said in a statement. “And while delinquency rates have edged up, they appear to have normalized to pre-pandemic levels.”

Not only are balances higher, but more cardholders are also carrying debt from month to month, according to a separate Bankrate report, adding to the financial strain.

Other options for student loan relief More

Waiting to claim Social Security up until age 70 will give you the biggest retirement benefit possible.
Yet, a new survey finds just 10% of people plan to wait that long to start their monthly checks.
By waiting up to age 70, retirees can lock in the biggest benefit checks available based on their work records.

Maryviolet | Istock | Getty Images

Research suggests it’s best to hold off on claiming Social Security retirement benefits until age 70, if possible, to get the biggest monthly payments available to you.
However, just 10% of nonretired Americans plan to wait until that age to start their monthly benefit checks, a new survey from asset management company Schroders finds. That includes 17% of respondents ages 60 to 65, who may be on the brink of retirement, according to the results.

Meanwhile, 40% of respondents said they plan to take their Social Security retirement benefits between ages 62 and 65, according to the survey of 2,000 investors ages 27 to 79 taken between February and March.
Yet, most investors — 72% of all nonretired investors and 95% of nonretired investors ages 60 to 65 — said they know waiting longer could result in bigger monthly checks.

The top reason for claiming early, cited by 44% of respondents, is the concern that Social Security may run out of money and stop making payments, pointing to a “crisis of confidence” in the system, according to Deb Boyden, head of U.S. defined contribution at Schroders.
Other reasons included needing the money, with 36%; wanting to access the money as soon as possible, 34%; and acting on advice to claim earlier than 70, with 13%.

Why it pays to wait to claim Social Security benefits

Early claiming will affect the size of your monthly Social Security checks.

Those who turn 62 this year will have their benefit reduced about 30% for claiming now compared with waiting until their full retirement age of 67, according to the Social Security Administration.
At full retirement age, workers stand to receive 100% of the benefits they earned.
For each year delayed past full retirement age to age 70, 8% is added to Social Security benefits.
By waiting up to age 70, retirees can lock in the biggest benefit checks available based on their work records.
Retirement benefits taken at age 70 are 76% higher, adjusted for inflation, than retirement benefits taken at 62, according to research from Boston University economics professor Larry Kotlikoff, Federal Reserve Bank of Atlanta executive vice president David Altig and Opendoor Technologies research scientist Victor Yifan Ye.
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Like Schroders, the researchers found only about 10% of workers actually wait until age 70 to claim Social Security benefits, though more than 90% would benefit from waiting until that age.
“The return on being patient is huge with Social Security,” Kotlikoff said.
While high earners may leave the most money on the table by claiming early, people with limited assets also face high stakes because of how dependent they are on the money, he said.
In some cases, it may make sense to claim early, such as if a health condition may shorten your life span. Yet, even for some people with those circumstances, delaying benefits may still make sense to trigger higher benefits for a spouse, according to Kotlikoff.

Nearly $5K per month for a comfortable retirement

When it comes to retirement, there is one big question savers face: How much money is enough?
Americans expect to need $1.27 million to retire comfortably, according to recent research from Northwestern Mutual. When it comes to monthly income needed to enjoy a comfortable retirement, nonretirees said they need $4,940, on average, according to Schroders.
Those who are already in retirement are coming up short of that goal, the survey found, with monthly income of $4,170, on average, including Social Security. Notably, 37% of those respondents said their monthly income is less than $2,500.
Aside from Social Security, nonretired Americans expect to generate income from a mix of assets. More than half plan to draw from cash, with 58%, followed by workplace retirement plans, 53%; investments outside employer-provided retirement plans, 40%; defined benefit or pension plans, 20%; rental income, 14%; annuities, 10%; cash value life insurance, 10%; or a reverse mortgage, 4%.
However, the challenge will be coming up with a steady stream of income that mimics a regular paycheck, Boyden noted. About half of respondents, 49%, said they do not have a retirement income strategy and just take money when they need it.
Yet, more than half — 57% — said the idea of not having regular paychecks in retirement is concerning, while 23% said it is terrifying.
“The retirement industry has collaborated to solve for accumulation; now we need to turn to solving for those spend down years,” Boyden said. More