The rent increase faced by renters in new york City is particularly bad, because the compensation effect of wage increase is not as good as that in other parts of the United States. A version of Michael nagel/Bloomberg/Getty Pictures first appeared in CNN Business before Bell Communications. Not a subscriber? You can register here. You can listen to the audio version of the newsletter by clicking the same link. New York CNN — The American dream of owning a house looks more like a nightmare.
With inflation heating up again, it is impossible for the Fed to consider cutting interest rates at its upcoming meeting. After rising for five weeks in a row, this helped to push the average fixed interest rate of 30-year mortgage to above 7.2%.
Consumers don't expect mortgage interest rates to fall soon. In the coming year, they expect the mortgage interest rate to rise to nearly 9%. In the next three years, they expect the interest rate to be close to 10%. This is according to a survey released on Monday by the Federal Reserve Bank of new york to assess consumers' expectations of the real estate market.
Most importantly, after house prices began to fall last year, families are preparing for the rebound of house prices next year.
But the problem is: it is not cost-effective to rent a house now. A survey by the Federal Reserve Bank of new york found that consumers are preparing for a bigger increase than the expected increase in mortgage interest rates in the coming year.
The problem of rent affordability is particularly prominent in new york. Except for the temporary relief during the epidemic, the housing cost in new york City has been higher than that in other parts of the United States.
But according to an analysis report released by Zillow on Tuesday, to make the burden even heavier, the growth rate of rents in the city last year was seven times that of wages. This is the biggest gap among the 50 largest metropolitan areas in the United States. However, across the country, the wages of Americans increased faster than the rents last year.
The role of the Fed: Kenny Lee, a senior economist at StreetEasy, a subsidiary of Zillow, said in a statement on Tuesday that the strong job market that the Fed is trying to protect while curbing inflation is not good for renters in new york City. This is because the construction of new houses in this city is particularly difficult to meet the employment demand.
Would it be different if the Fed raised interest rates faster in 2022 when inflation reached a multi-decade high?
"If the Fed had raised interest rates earlier, inflation might have returned to the target level more quickly," Aditya Bowie, a senior American economist at Bank of America, told CNN. If this happens, it may not be necessary for the central bank to keep interest rates at the current high level for so long.
This may help prevent mortgage interest rates from rising to the current level, because, as Neil Kashkali, president of the Federal Reserve Bank of Minneapolis, said in an interview with Bloomberg TV on Tuesday, real estate "has traditionally been the most sensitive sector of the economy to interest rates."
However, Bauer said, "With hindsight, a lot of inflation was caused by supply disruptions that the Fed could not stop."
On the other side of the equation, if the Fed doesn't keep interest rates near zero within two years, many current homeowners who lock in low interest rates will not be able to own their own houses.
One of the dangers now is that many Americans who have postponed their home purchase plans may not be able to "participate in the appreciation of the value of their houses, which may affect the distribution of wealth in the long run", Bavi said.
Slaughterhouse cleaning company was fined 9,000 for employing child labor.
A cleaning company was fined 9,000 after an investigation found that it hired minors to do dangerous work in cleaning slaughterhouses, the Labor Department said on Monday.
According to the investigation of the Ministry of Labor, Fayette Domestic Service Company employs at least 24 children, including children as young as 13 years old. According to the Ministry of Labor, these minors have been working night shifts in two independent slaughter facilities.
Federal labor laws prohibit children from doing certain jobs in slaughterhouses and meat packing plants, including using or cleaning machines, because these working conditions are dangerous.
This is not the first illegal child labor incident in the meat processing industry recently.
According to the Labor Department, children were found working in the seaside Triumph Food Factory in Sioux City, Iowa, and the Poultry Processing Factory at Purdue Farm in Alcomark, Virginia. "Minors are used to clean dangerous slaughtering equipment, such as head splitters, jaw wrenches, band saws and neck pliers," the Labor Department described its findings in a press release in February.
A spokesman for the company told CNN in a statement in February that Perdue "terminated our contract with Fayette Domestic Service Company before submitting court documents", adding that "underage workers have no place in our business or industry."
Seaboard, a pork processor, told CNN in a statement that it "immediately terminated all contracts with Fayette" after learning of the allegations of the Labor Department. According to the statement, "this kind of behavior, if true, violates the policies and procedures of our company and the strict commitments made by Fayette in their contract."
Seaboard said: "Our company will continue to take all appropriate follow-up measures to protect workers and ensure that its contractors abide by the accountability system of labor and employment laws.
In recent years, the illegal use of child labor has been increasing, and other contractors have also been fined for hiring minors. According to a survey by the Ministry of Labor, last year, the packers' health service company paid a civil fine of .5 million for hiring minors to engage in dangerous occupations and making them work all night.
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Tik Tok sued for blocking US application ban.
Brian Fung, a CNN reporter, reported that after US President Joe Biden signed legislation last month, Tik Tok issued a legal threat and sued on Tuesday to block a US law that might force a nationwide ban on this popular app.
The challenge of the court triggered a historic legal struggle, which will determine whether the security concerns of the United States about Tik Tok's connection with China will exceed the First Amendment rights of 170 million American users in Tik Tok.
This case concerns Tik Tok's life and death. If it loses, Tik Tok may be banned from entering the US App Store unless its Chinese parent company ByteDance sells the app to a non-China entity before mid-January 2025.
In a petition filed with the U.S. Court of Appeals for the District of Columbia Circuit on Tuesday, Tik Tok and ByteDance claimed that the law was unconstitutional because it stifled American speech and prevented them from obtaining legal information.
Prior to this, the United States had been accusing Tik Tok's relationship with China for years, which might expose Americans' personal information to the China administration.
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