Why the 'Trump Effect' Continues to Affect Us

It’s kind of fun to watch the ways the stock market moves, and then theorize about what’s happening and why.

SEE ALSO: Donald Trump’s Presidency and Your Investment Portfolio

But if you’re reacting to each new “expert opinion” when managing your own portfolio, or examining every trend and pattern, well … good luck. It’s folly to imagine you can outguess the greed, optimism, fear and other emotions of Wall Street and your fellow investors.

How Wall Street Got the Election Wrong

Take, for example, the so-called Trump Effect, when stocks soared after the presidential election and then continued to produce record-setting highs.

It all seems pretty logical now, with a businessman-turned-president who is expected to cut taxes, roll back financial regulations and, in general, be corporate- and investor-friendly. But that giddy market optimism certainly wasn’t what most experts were predicting before the election.

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In contrast with what’s going on today, going into 2016, there didn’t seem to be a lot of confidence in the markets, here or globally, regardless of who the presidential candidates might be. Chinese markets actually used their “circuit-breaker” system multiple times, thereby suspending their markets, because things were so volatile. In the U.S., the S&P was down 5%, the Dow was down over 5.5% and small stocks as measured by the Russell 2500 Index were down 8%.

By all measures, it seemed the party was over and the bull market that started in 2009 finally might be running out of steam just as the election was getting close.

Conventional Wisdom Goes Awry

After the conventions, Hillary Clinton seemed to be Wall Street’s lesser of two evils: The market likes certainty — or so the conventional wisdom goes — and with her, at least you knew what to expect. Donald Trump was a wild card, the talking heads said. (And Clinton had a 90%-plus chance of winning, they told us.)

SEE ALSO: Why Trump’s Move to Dismantle Rule Protecting Investors Isn’t a Bad Idea

Of course, each party was predicting that if the other won, it would take the economy over a fiscal cliff. And even before the election, investors were wondering if they should just get out.

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So, the election-night surprise was Trump’s win, and not the futures market’s reaction. According to CNN Money, Dow futures dove 870 points at 12:10 a.m., about a half-hour after Trump was projected to win Florida. (To put that into context, on the worst day in 2008, that number was 800.)

And yet, by the time Trump gave his victory speech, things had rebounded somewhat, and the day after the election, the Dow finished up 257 points. That means the total swing in about a 12-hour period was 1,000-plus points, or more than 5.5%.

Investors’ Worst Enemy: Themselves

Since the election, the S&P is up over 10%, as of early July; the Dow is up over 12%, and the Russell 2500 is up almost 12%. And all those people who tried to guess at what to do just before and just after the election? A lot of them likely guessed wrong — selling low and then buying high to get back in.

Now, this may be one of the more well-known and recent examples of a profound market mood swing, but phenomena like the Trump Effect are not at all unusual.

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According to the most recent Dalbar study, the 2016 “Quantitative Analysis of Investor Behavior,” the main reason investors who participate in the markets underperform over time is psychology, due to behaviors such as panic selling and herding.

In other words, trying to time the market hurts far more than it helps.

No More Knee-Jerks … Take a Long-Term Approach

Why are investors so skittish? Information overload. We have so much information to sift through, it’s almost impossible to decide what’s good and what’s biased. And you can’t turn it off. It’s like trying to diet on a cruise ship.

We end up forming an opinion based on what we feel, and we tend to opinion shop until we find a financial professional who matches our preconceived biases, without really knowing that person’s track record or what information he or she has.

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That’s why, these days, for financial professionals, educating our clients has to be one of our top goals. Your adviser should be coaching you and monitoring your plan, making sure your risk level is appropriate for your situation and helping you navigate through conflicting signals.

Because, as you can see from the Trump Effect, the markets can move really quickly — for reasons that sometimes can, but often cannot, be predicted or explained.

Kim Franke-Folstad contributed to this article.

SEE ALSO: What Investors Need to Know About Risk

Blake Morris is a CERTIFIED FINANCIAL PLANNER™ professional with The Lloyd Group Inc., based in Suwanee, Ga., where he develops customized plans for retirees and soon-to-be retirees. Blake is licensed to sell insurance.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Why the 'Trump Effect' Continues to Affect Us

Avoid Getting Entangled by Taxes in Retirement

If you’re not careful about planning ahead, taxes could trip up your retirement plans.

SEE ALSO: 6 Tax-Efficient Strategies to Keep More of Your Money in Retirement

Taxes should never be overlooked in retirement planning. Fifty years ago, most Americans would have their homes as their largest assets. But now, with millions of Americans using IRAs and other retirement accounts, their retirement savings are often their biggest assets.

Too often we assume that our taxes will go down when we retire, but that’s not always the case. Even when you are doing the right things and planning ahead, you might be setting yourself up for a tax trap down the road. You might be paying into a retirement account and enjoying the immediate tax benefits, but that money could be taxable in the future.

It’s important to understand how those taxes can affect you in retirement based on your tax bracket, your filing status and other factors, including Social Security and pension benefits. You might even end up in the same or possibly a higher tax bracket in your retirement than you were while you were working.

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All of this underscores the importance of planning ahead for your retirement. You need to figure out which tax breaks, exemptions and deductions you will be able to qualify for when you have retired. When you start receiving Social Security, you will have to calculate your provisional income to see how much of it will be taxed.

Social Security can also muddy the waters as you try to figure out what your taxes will be in retirement. One thing to keep in mind in your retirement planning is that Social Security is taxed based on your other income, meaning you have to look at the tax rates and tax brackets to know how much of your Social Security will be considered as provisional income. With Social Security in the mix, you also have to understand what your effective tax rate is when you reach retirement. Throw in non-taxable interest, capital gains, dividends and other income, and the taxes can add up. This often requires some drilling down.

Too many of us are under the wrong impression that Social Security isn’t taxable. That’s simply not correct as up to 85% of your Social Security benefits can be taxable. The more income you pull in, the more taxes you will pay. If you file as an individual, you have to pay taxes if your combined income, including half of what you take from Social Security, is more than $25,000. In that case, as much as 50% of your Social Security benefits can be taxed. If your combined income is more than $34,000, you might have to pay taxes on 85% of your Social Security benefits. If you and your spouse have a combined income of more than $32,000 in combined income, you will have to pay taxes on what you draw from Social Security, with as much as 50% being taxable. If you and your spouse earn more than $44,000 in combined income, up to 85% of your Social Security benefits may be taxable.

SEE ALSO: Making Next Year’s Taxes Less Painful

Often people who decide to start taking Social Security benefits at 62, the earliest age to opt in, and continue to earn good incomes are hit the hardest when it comes to paying taxes on Social Security.

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There are other factors to calculate as you plan ahead to your retirement. When you reach age 70½, you have to start taking required minimum distributions (RMDs) from your IRAs and other retirement plans. The RMDs are based on calculations from a life expectancy table. More often than not, RMDs are taxed as ordinary income, though you can choose to send the funds to charity, making it a qualified charitable distribution (QCD) instead of taking the withdrawal. That can often prove an advantageous tax strategy in retirement. As you get older, RMD rules require you to take an ever-increasing percentage out of your retirement accounts, starting at 3.6% when you’re 70 and rising to 5.3% at 80 and 8.8% at age 90.

While it’s unpleasant to think about, your filing status also comes into play. Surviving spouses are often confronted with higher tax burdens going into a less favorable tax bracket after the loss of their loved ones.

You might have spent decades stashing your hard-earned income into retirement accounts. But you might also find that you will pay more taxes when you pull that money out of those retirement accounts than you saved when you put it in.

It’s daunting to think about. Nobody wants to pay higher taxes in retirement than they did during their years in the workforce. Thankfully, there are plenty of alternative strategies to help avoid some of these taxes and reduce your tax burden in retirement. These include diversifying your retirement savings in tax-deferred accounts like traditional IRAs and 401(k)s and tax free ones including Roth IRAs. You can also look at alternatives including life insurance policies, annuities, real estate investment trusts (REITs) and other investment possibilities.

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It’s important to bring in an experienced financial adviser who specializes in helping with retirement planning to ensure your retirement isn’t entangled by taxes and more of your money stays in your pocket.

Kevin Derby contributed to this article.

SEE ALSO: Taxes Can Be a Real Threat to Your Retirement

Don Ross, founder and president at Ross Wealth Advisors, has more than 25 years’ experience in the insurance and financial services industry. He has passed the Series 7 securities exam and holds a life insurance license in Ohio. Retired from the military after more than 20 years of service as a pilot in the Ohio National Guard, Ross lives in Upper Arlington, Ohio, and enjoys traveling, yard work and cycling. He and his wife, Joni, have three children: Judith, Ryan and Lance.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Avoid Getting Entangled by Taxes in Retirement

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Do Lenders Allow You To Borrow Your Down Payment?

Is it okay to borrow your down payment? At first glance, the rules mostly say no. Except for a few programs, lenders prefer you to use your own resources. The risk of default goes down when homebuyers have “skin in the game,” and lenders know this.

But there can be ways around those rules. However, depending on the route you take, you may have to tread carefully.

Click to see your low-downpayment loan eligibility (Jul 23rd, 2017)

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Enjoy the Seasoning

Suppose that just before you apply for a mortgage, you apply for a personal loan or cash advance on your credit cards. Your lender will assume it’s for your down payment.

But, just like wood, borrowed money seasons and changes its properties. It becomes indistinguishable from money that you saved.

And, after a short time, lenders become blind (for down payment purposes only) to differences between your personal loan and money you earned, inherited or were given.

How To Borrow Down Payment Funds

For many lenders, it takes only 60 days for that blindness to set in. That means you’ll then be able to put your personal loan toward your down payment. No questions asked.

Take Your Time

However, not all lenders observe that 60-day cut off. Some want three or more months of bank statements. So it’s a good idea to land your personal loan several months before you make your mortgage application.

Lenders also look at your bank statements for large deposits, and they compare your average balance to your current balance. Leaving the money in there longer will reduce the chance of your average balance being a lot lower than your current balance.

Finally, getting your credit score into the best shape possible should be a big priority for you. Even a variation of a few points in your score can make an appreciable difference to the mortgage rate you’re offered. Use this time to improve it.

Protect Your Credit Score

Your personal loan application will hit your credit score. Not just once, but twice:

1. Every time a lender makes a “hard inquiry” (one where it accesses your credit report to decide whether to lend to you), your score is dinged. (Different rules apply when you’re rate shopping for a mortgage.)


2. Opening a new account reduces the average age of all your accounts. And that too damages your score.

Shop For A Mortgage Without Lowering Your Credit Score

Time Heals

Providing you make prompt payments on your new account, your score should bounce back within a few weeks.

What Is A “Good” Credit Score, And How Do You Make It Even Better?

So give your score breathing space. Some suggest you don’t open or close any accounts during the six months before you make a mortgage application.

Watch Your Debt-to-Income Ratio

Lenders may soon become blind to your personal loan when assessing your down payment sources. But they’ll see it when evaluating your ability to afford your new mortgage.

Central to that evaluation is your “debt-to-income ratio” (DTI). This is the proportion of your monthly income that goes out in regular monthly debt payments.

Your Debt-To-Income Ratio Can Tell You How Much Home To Buy

When you apply for your mortgage, by law you must disclose your personal loan balance and payment. And it’s likely to show up on your credit report anyway.

When Lenders Don’t Care If You’ve Borrowed

There is an exception to lender rules about borrowed mortgage down payments: when you borrow from yourself.

Most lenders (though fewer financial advisers) don’t mind you raiding your retirement accounts for your down payment. In fact, they often won’t count your payments back into your funds as part of your DTI.

You Don’t Need 20 Percent Down To Buy A Home

But borrowing from these funds is a big step. So check with your tax accountant before doing so to make sure you recognize all the pros and cons, including any tax implications.

Your 401(k)

Different 401(k) programs have different rules. So talk with the people who manage yours to explore your options.

Loans may or may not be available. You also need to know what will happen if you switch employers and leave the program before the loan’s fully repaid.

Read This Before Borrowing From Your 401(k) To Buy A Home

But, whatever your program’s rules, you won’t be able to borrow more than half your current balance, up to a maximum of $50,000. That’s the law.

However, there’s a legal exception if your balance is $20,000 or less: You can borrow the whole amount up to $10,000, subject to your program’s rules.

Your IRA

The rules for individual retirement accounts (IRAs) are stricter, certainly if you want to avoid standard penalties. They include:

• You can’t withdraw more than $10,000.


• You’re buying a home.


• You haven’t owned a home (or had any “ownership interest” in one) for the previous two years.


• You can borrow in this way only once in your entire life.


• You must use the funds within 120 days of their arrival.


• You may still have to pay income tax on the sum you withdraw.

How To Buy A House With No Money Down In 2017

You really need professional advice to make sure you comply with these and other rules. Or at least research your plans through the IRS website or call center.

Gifts from Family and Friends

You can use gifts from close family to fund all or part of your down payment. However, these will have to be fully documented, including a letter from each donor confirming the money is not a loan.

How To Give And Receive A Cash Down Payment Gift For A Home

Grants and Loans

Don’t forget to explore all your options for funding your down payment before borrowing. Some employers offer exceptionally cheap loans just for that purpose. And a few even provide grants, which don’t have to be repaid.

The Lowdown On Down Payment Grants

And the same applies to government and charitable programs. This is called DPA, or down payment assistance. Studies have shown that many who qualify for such programs have no idea that they even exist.

Loans from Family and Friends

Meanwhile, there’s sometimes nothing to stop you borrowing your down payment from family and friends.

While such a loan won’t normally show up on your credit report, you should disclose the debt so your lender can factor it into your DTI ratio.

The Family Mortgage: Borrowing From Loved Ones Instead Of A Bank

It’s worth noting that lying on a mortgage application comes with maximum penalties of 30 years in federal prison and $1 million in fines.

Avoid Down Payments Altogether

Before getting too hung up on your down payment, make sure you need one. A surprising number of borrowers can put down small sums or even nothing.

Getting Sellers To Pay Your Closing Costs

With seller concessions, you can reduce what you need for closing costs as well.

What Are Today’s Mortgage Rates?

Today’s mortgage rates are especially attractive after recent dips. But most experts predict rates and housing prices to trend higher. If borrowing a down payment can get you into a home before this happens, it’s probably a good decision.

To get the best mortgage rates, compare quotes from several lenders and choose the one with the best terms.

Click to see your low-downpayment loan eligibility (Jul 23rd, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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Mortgage Rates Lowest in July

Mortgage rates moved lower today, setting yet another new low for the month of July. For the past 2 weeks, rates have been pushing back against a fairly abrupt spike that took place heading into the month. Concerns over the European Central Bank’s (ECB’s) bond buying plans sparked the move higher, but those concerns were officially put to rest as of yesterday. In simpler terms, extra demand for bonds pushes bond prices higher and rates lower. The ECB buys LOTS of bonds. This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit). There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds (thus the rate spike heading into July). While that day will likely come eventually

Mortgage Rates Lowest in July

as-mortgage-demand-cools-and-competition-heats-up-more

June 26, 2017

As Mortgage Demand Cools and Competition Heats Up, More Lenders Are Planning to Ease Credit Standards

Katie Penote

202-752-2261

WASHINGTON, DC – More mortgage lenders say they have eased credit standards recently and expect further easing in the coming months, according to Fannie Mae’s second quarter 2017 Mortgage Lender Sentiment Survey^®. On net, the share of lenders reporting they have eased mortgage credit standards over the prior three months has ticked up gradually since the fourth quarter of 2016. Additionally, when anticipating the next three months, the net share of lenders saying they plan to ease credit standards for GSE eligible, non-GSE eligible, and government loans reached or surpassed survey highs this quarter.

Concerns regarding economic conditions were a top driver for changes in lending standards. Across the three loan types, the share of lenders who reported growth in purchase mortgage demand dropped to the lowest net reading in years for the second-quarter period. The drop in purchase mortgage demand also reflects the latest findings in the Fannie Mae National Housing Survey^®, in which the net share of consumers who reported that now is a good time to buy a home dropped to a record low. The results of both surveys mirror the ongoing narrative for housing: Tight inventory has pushed up home prices, which is weighing on affordability and constraining sales.

“Expectations to ease credit standards climbed to survey highpoints in the second quarter as more lenders reported slowing mortgage demand and increasing concerns about competition from other lenders,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Lenders cited additional contributing factors such as diminishing compliance concerns and more support from the GSEs, including clarification on representations and warranties and tools that provide greater certainty during the loan underwriting process. Easing credit standards might also be due in part to increased pressure to compete for declining mortgage volume. For the third consecutive quarter, the share of lenders expecting a decrease in profit margin over the next three months exceeded the share with a positive profit margin outlook. For the former, the percentage citing competition from other lenders as a reason for their negative outlook reached a survey high.”

MORTGAGE LENDER SENTIMENT SURVEY HIGHLIGHTS

Purchase mortgage demand

• The net share of lenders reporting demand growth over the prior three months has fallen for all loan types when compared with Q2 2016 and Q2 2015, reaching the lowest reading for any second quarter over past two years.


• However, the net share of lenders expecting increased demand over the next three months remains relatively stable for the same quarter year over year.
  
  

Refinance mortgage demand

• The net share of lenders reporting rising demand over the prior three months fell significantly to a three-year low, across all loan types.


• The net share of lenders reporting demand growth expectations for the next three months has changed little from last quarter (Q1 2017).

Easing of credit standards

• The net share of lenders reporting easing of credit standards over the prior three months has gradually ticked up since Q4 2016.


• Net easing expectations for the next three months have also gradually climbed. In particular, the net easing share for GSE eligible loans and government loans for the next three months reached new survey highs this quarter (though modest in absolute percentage) and that for non-GSE eligible loans tied a survey high reached in Q2 2014.

Mortgage execution

• On net, lenders continue reporting expectations to grow GSE (Fannie Mae and Freddie Mac) and Ginnie Mae shares over the next 12 months and reduce portfolio retention and whole loan sales shares.

Mortgage servicing rights execution

• This quarter, slightly more lenders reported expectations to decrease rather than increase the share of MSR sold and the share of MSR retained and serviced in-house (as opposed to by a sub-servicer).


• The majority of lenders continued to report expectations to maintain their MSR execution strategy.
  
  

Profit margin

• The net share of lenders reporting a negative profit margin outlook has declined since reaching the survey’s worst reading in Q4 2016. However, more lenders reported a negative outlook than a positive outlook.
  
  • Mid-sized institutions are most likely to expect a net decrease in profit margin, while larger institutions are more likely to expect an net increase in profit margin.
  
  


• Concern about competition from other lenders set a new survey high this quarter across all profit-margin drivers, cited as the key reason for lenders’ decreased profit margin outlook.


• The perceived impact of “government regulatory compliance,” which declined sharply in Q4 2016, has remained low the past three quarters relative to most of the prior two years’ readings.

The Mortgage Lender Sentiment Survey by Fannie Mae polls senior executives of its lending institution customers on a quarterly basis to assess their views and outlook across varied dimensions of the mortgage market. The Fannie Mae second quarter 2017 Mortgage Lender Sentiment Survey was conducted between May 3, 2017 and May 14, 2017 by Penn Schoen Berland in coordination with Fannie Mae. For detailed findings from the second quarter 2017 survey, as well as survey questionnaires and other supporting documents, please visit the Fannie Mae Mortgage Lender Sentiment Survey page on fanniemae.com. Also available on the site are special topic analyses, which focus on findings and analyses of important industry topics.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) group or survey respondents included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/FannieMae.


as-mortgage-demand-cools-and-competition-heats-up-more

freddie-mac-june-2017-outlook

MCLEAN, VA–(Marketwired – Jun 23, 2017) – Freddie Mac (OTCQB: FMCC) today released its monthly Outlook for June, which shows that despite some recent bumps, the U.S. housing market remains on track to exceed last year’s best-in-a-decade levels for housing starts and home sales.

Outlook Highlights 

• May marked the 80^th consecutive month of job gains. The unemployment rate dropped another 0.1 percentage points to 4.3 percent. Despite last month’s lull in housing data, the economy will continue to bolster the overall housing market.


• In April, housing starts fell 2.6 percent and permits for single-family homes also declined. After a strong March, home sales also a took a hit with new home sales falling 11.4 percent and existing home sales falling 2.3 percent in April. These recent declines are likely to reverse as low mortgage interest rates and solid job gains boost the housing market. 


• Average mortgage rates have declined more than they have risen in recent weeks. However, they are still almost 50 basis points higher than last year’s low. Unless rates fall below 3.5 percent for an extended period, refinance volume will fall short of last year’s levels. Expect mortgage origination volumes to decline $370 billion for 2017.


• Strong demand and a short supply of housing in many markets continues to push house prices higher. Expect house price appreciation to be over 5 percent for 2017.


• In the first quarter of 2017, the homeownership rate was 63.6 percent — six percentage points lower than its peak in 2004 when it reached its all-time high of 69.2 percent.

Quote: Attributed to Sean Becketti, Chief Economist, Freddie Mac.

“After a strong March, the housing market, from housing starts to new and existing home sales, took a hit in April. The recent declines are likely to reverse as low mortgage interest rates and solid job gains boost the housing market. We expect housing starts and home sales to firm in the coming months and for 2017 to exceed 2016’s best-in-a-decade levels.”

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

freddie-mac-june-2017-outlook

Job Growth Looking Better, Wage Growth Not

• GDP


• Unemployment


• Interest Rates


• Inflation


• Business Spending


• Energy


• Housing


• Retail Sales


• Trade Deficit

GDP	2.1% pace in ’17, 2.4% in ’18 More »
Jobs	Hiring pace should slow to 175K/month by end ’17 More »
Interest rates	10-year T-notes at 2.4% by end ’17 More »
Inflation	1.6% in ’17, down from 2.1% in ’16 More »
Business spending	Rising 3%-4% in ’17, after flat ’16 More »
Energy	Crude trading from $40 to $45 per barrel in September More »
Housing	5.5% price growth by end of ’17 More »
Retail sales	Growing 3.5% in ’17 (excluding gas) More »
Trade deficit	Widening 4% in ’17, after nearly flat ’16 More »

Good growth — 222,000 new jobs in June and upward revisions to May and April figures — paint a rosier picture of the labor market. This momentum may extend the time of strong job growth. However, monthly job gains are still expected to slow to 175,000, on average, by the end of the year. As the labor market tightens, it becomes harder for employers to find suitable candidates.

The upticks in retail and government sectors were a surprise. Department stores and other general merchandise purveyors added 12,200 jobs, breaking a four-month string of losses. However, this positive news is not likely to last. Local governments filled a boatload of positions, but government hiring surges tend not to be sustained.

Industries that have been doing well continued to do well. Mining added jobs for the eighth month in a row. Health care, professional and business services, and food services continued their strong hiring activity. Restaurant hiring should be slowing down, given sluggish sales growth and higher minimum wages in some localities.

via e-mail: Kiplinger Alerts — Intelligence for your business success

The unemployment rate ticked up to 4.4%, as more folks who had given up on job hunting responded to the strong hiring activity by looking for jobs again.

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Wage gains for nonsupervisory workers in June slipped to 2.3%, indicating that rising wage pressures from a tighter labor market are still a ways off. Nonsupervisory workers compose four-fifths of the workforce and tend to spend more of their paychecks, so prices and consumer spending tend to reflect their pay increases. Stronger wage growth should happen eventually, but history shows that it takes time for low unemployment to provoke higher wage growth. Also, cost-of-living raises are fairly low because the inflation rate is less than 2%.

See Also: The Best Jobs for the Future

Source: Department of Labor, Employment Data

Job Growth Looking Better, Wage Growth Not

Equifax Announces Earnings Release Date and Conference Call for Second Quarter 2017 Results

ATLANTA, June 28, 2017/PRNewswire/ —Equifax Inc. (NYSE: EFX) will release its financial results for the second quarter ending June 30, 2017, in a press release to be issued after the New York Stock Exchange closes on Wednesday, July 26, 2017. The press release will also be available at www.equifax.com.

Equifax will host a conference call at 8:30 a.m. ET on Thursday, July 27, 2017 in which senior management will discuss financial and business results for the quarter. Please dial the appropriate number 5-10 minutes prior to the start of the call to complete registration. Name and affiliation/company are required to join the call.

Conference call numbers: U.S. and Canada: (800) 263-0877; International: (719) 457-1036.

Replay: A replay of the conference call will be available beginning July 27, 2017 at 11:30 a.m. ET and ends at 11:30 a.m. ETAugust 10, 2017. To access the replay please register.

About Equifax

Equifax is a global information solutions company that uses trusted unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its database includes employee data contributed from more than 7,100 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,700 employees worldwide.

Some noteworthy achievements for the company include: Named to the Top 100 American Banker FinTech Forward list (2015-2016); named a Top Technology Provider on the FinTech 100 list (2004-2016); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2017); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015-2016). For more information, visitwww.equifax.com.

FOR MORE INFORMATION

1550 Peachtree Street, NE
Atlanta, Georgia 30309

Marisa SalcinesMedia Relations

678-795-7286

Marisa.Salcines@equifax.com

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/equifax-announces-earnings-release-date-and-conference-call-for-second-quarter-2017-results-300481026.html

SOURCE Equifax Inc.

Equifax Announces Earnings Release Date and Conference Call for Second Quarter 2017 Results

Two major lending changes mean it's suddenly easier to get a ... - CNBC

Credit reports, however, can have mistakes on them that end up sidelining consumers from qualifying for loans. Twenty percent of consumers have at least one mistake on one of their three credit reports, according to a Federal Trade Commission study. The concern is that those who do have legitimate liens and judgments against them will get credit that is undeserved.

“It doesn’t really do a consumer well to be extended credit that they can’t afford, they can’t reasonably service,” said Brown.

In addition to the FICO changes, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent. That is designed to help those with high levels of student debt. That means consumers could be saddled with even more debt, heightening the risk of default, but the argument for it appears to be that risk in the market now is unnecessarily low.

“In this case, we’re changing the underwriting criteria, and we think the additional increment of risk for making that change is very small,” said Doug Duncan, Fannie Mae’s chief economist. “Given how pristine credit has been post-crisis, we don’t feel that is an unreasonable risk to take.”

During the last housing boom, anyone with a pulse could get a mortgage, but after the financial crisis, underwriting rules tightened significantly. As a result, current default rates on loans made in the last eight years are lower than historical norms. At the same time, younger borrowers with high levels of student loan debt are being left out of the housing recovery, unable to qualify for a home loan. Duncan said a consumer’s debt level is just one of many factors considered by lenders when underwriting a mortgage.

“We look at all the other criteria that are information rich, in terms of assessing that individual’s risk profile, and they have to look good in all those other areas,” he added.

The level of risk to the mortgage marketplace, banks and nonbank lenders alike, will rise. Fannie Mae and Freddie Mac are still under government conservatorship, which means losses would be incurred by taxpayers.

Two major lending changes mean it's suddenly easier to get a ... - CNBC