Credit Sesame’s personal finance news roundup for May 3, 2025. Stories, news, politics and events impacting personal finance during the past week.
Job growth slows in April 2025
The Bureau of Labor Statistics reported that the U.S. economy added 177,000 jobs last month. That was down a little from March’s 185,000 new jobs. Also, the originally released figures for February and March were revised downward by a combined 58,000 jobs. Healthcare remained the biggest area of job growth, with 51,000 new jobs in April. The biggest decline was in government employment, which lost 9,000 jobs during the month. The report also noted that people on paid leave or still receiving severance pay are counted as employed, so the full effect of government job cuts may be felt later on.
Economy contracts in Q1 for first time in three years
The Gross Domestic Product (GDP) of the United States contracted at an inflation-adjusted annual rate of 0.3% in the first quarter of 2025. It was the first negative quarter for GDP in three years, and follows a 2.4% growth rate in the fourth quarter of 2024. The first-quarter GDP number declined despite being supported by a strong quarter for inventory investment, as companies sought to build up supplies in advance of tariffs. See GDP report at BEA.gov.
Fed eases up on bank crypto rules
The Federal Reserve has withdrawn previous instructions to banks about investments in crypto-assets. That guidance permitted banks to invest in crypto but warned them about the special risks of those investments. It also required banks to inform the Fed in advance of planned crypto activities. The risks the Fed had previously cautioned banks about included fraud, lack of clear ownership documentation, inaccurate representations by crypto-asset companies, and significant price volatility. The withdrawal of this guidance in April 2025 shows a new willingness to allow banks to learn about these risks by experiencing them. See announcement at FederalReserve.gov.
Moody’s downgrades D.C. credit rating
Moody’s Ratings has lowered the credit rating of the District of Columbia. The move is likely to cost the city more in interest on its municipal debt. The Moody’s report said they lowered the rating because federal government layoffs and budget cuts would erode the financial stability of the District over the next four years. See article at Yahoo.com.
Tariff impact expected to hit poorest households hardest
A new analysis by the Institute on Taxation and Economic Policy (ITEP), released in April 2025, shows that the burden from new tariffs would fall more than three times more heavily on poor households than on rich ones. At least some of the cost of tariffs is expected to be passed along to consumers. ITEP estimates that this will cost households in the lowest 20% of incomes an extra 6.2% of their income. Households in the lowest 20% are those earning less than $29,000 a year. Meanwhile, households in the top 1% are expected to pay an additional 1.7% of income due to tariffs. The top 1% are households earning at least $915,000 a year. See article at CNBC.com.
Home price growth slows in early 2025
The S&P Corelogic Case-Shiller National Home Price Index rose by 0.3% in February 2025. Over the past 12 months, the index is up by 3.9%. That’s down slightly from the 4.1% 12-month gain through January. Most of the gain occurred during the first half of that period, as price rises have slowed in recent months. Northern cities fared well over the past year, with New York showing the largest 12-month gain at 7.7%. This was followed by Chicago at 7.0% and Cleveland at 6.6%. At the other end of the scale, Tampa had the worst home price performance with a 1.5% decline over the past year. See home price index announcement at SPGlobal.com.
Mortgage rates dip again in late April 2025
Mortgage rates dipped slightly for a second consecutive week. Thirty-year rates fell by 5 basis points, to 6.76%. Fifteen-year rates fell by 2 basis points, to 5.92%. The latest changes leave both rates slightly below where they were at the start of 2025, but well above the low point reached at the end of last September. For example, 30-year rates are 9 basis points below where they were at the end of December, but 68 basis points above their level at the end of September. See rate details at FreddieMac.com.
Construction spending falls in March 2025
Total U.S. construction spending slowed by 0.5% in the month of March, compared to February’s level. Residential construction experienced a similar decline, slowing by 0.4% in March. However, both total and residential construction are up by 2.8% from March of last year. See details at Census.gov.
All weekly news headlines from Credit Sesame
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