U.S. Borrowing Less But Debt Still Growing; Retailers May Hike Prices Amid Supply Issues; Borrowers Falling Behind As Rates Strain Budgets
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The U.S. government now expects to borrow $55 billion less in Q1 2023 due to higher cash balances and fiscal flows. However, the national debt is still expected to grow unchecked.
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Supply chain disruptions and higher shipping costs could lead major retailers like Floor & Decor, Best Buy, Wayfair, and RH to raise prices or see squeezed profit margins.
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Borrowers are falling behind on bills as inflation, student loan payments resuming, and high interest rates strain budgets. Credit card debt grew 8.2% in December 2022 vs 2021.
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The Fed is expected to hold interest rates steady at its meeting this week, but economy watchers will look for clues on potential rate cuts at the next meeting in March.
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A Dallas Fed survey found 52% of manufacturers are hiring but struggling to find qualified applicants, a microcosm of the broader tight labor market.