News of the Day

Americans now owe $1.08 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York. Credit card balances spiked by $154 billion year over year, notching the largest increase since 1999, the New York Fed found.

“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, the New York Fed’s economic research advisor.

Credit card delinquency rates also rose across the board, according to the New York Fed, but especially among millennials, or borrowers between the ages of 30 and 39, who are burdened by high levels of student loan debt.

With most people feeling strained by higher prices — particularly for food, gas and housing — more cardholders are carrying debt from month to month or falling behind on payments, and a greater percentage of balances are going more than 180 days delinquent, according to a separate report from the Consumer Financial Protection Bureau.

Nearly one-tenth of credit card users find themselves in “persistent debt” where they are charged more in interest and fees each year than they pay toward the principal — a pattern that is increasingly difficult to break, the consumer watchdog said.

The Federal Communications Commission announced it will launch an inquiry to kick off the agency’s evaluation of the state of broadband across the country, as required by section 706 of the Telecommunications Act of 1996.

In light of the increasing uses and demands for broadband and the Congressional directives embodied in the Bipartisan Infrastructure Law,  this Notice of Inquiry (NOI) will take a fresh look at the Commission’s standards for evaluating broadband deployment and availability, the quality of the Commission’s available data, and the framework that the agency uses to make a finding under section 706.

In addition to focusing on a universal service standard, the NOI proposes to increase the national fixed broadband speed benchmark to 100 megabits per second for download and 20 megabits per second for upload, and discusses a range of evidence supporting this standard. The FCC previously set the benchmark at 25/3 Mbps in 2015 and has not updated it since. The NOI also seeks comment on setting a separate national goal of 1 Gbps/500 Mbps for the future.

Lastly, this inquiry will be the first to use the new Broadband Data Collection (BDC) data. In March 2020, Congress passed the Broadband DATA Act, which required the Commission to collect biannual data relating to the availability and quality of service of fixed and mobile broadband Internet access service for the Commission to create broadband coverage maps. Pursuant to the Act, the FCC now collects more precise, location-by-location broadband availability data through the BDC. Through this inquiry, the Commission will examine how these improvements to our data collection may impact the standards and inform the agency’s conclusions about broadband availability.

The National Association of REALTORS® says it will continue arguing its case against two class-action lawsuits challenging real estate compensation structures, even after one of NAR’s co-defendants reportedly agreed to a proposed settlement.

Anywhere Real Estate, formerly known as Realogy Holdings Corp., agreed to settle all claims against the company in the two cases, known as Sitzer/Burnett and Moehrl, according to news reports. Details of the settlement, which will need court approval, have not been released. No other parties named in the lawsuits, including NAR and several major real estate companies and MLSs, have agreed to settle.

The announcement of Anywhere’s settlement comes about a month before the Sitzer/Burnett lawsuit is set to go to trial.

“Settlement is always an option for any party in litigation. NAR’s commitment to defend ourselves in court remains unchanged, and we are confident we will prevail in proving the lawfulness of the rules under attack,” Mantill Williams, NAR’s vice president of public relations and communication strategy, said in a statement. “Pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers. The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and, thus, creating a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people.”

The lawsuits claim that NAR rules violate antitrust laws and inflate the fees paid to buyer’s agents by requiring a listing agent to compensate a buyer’s agent for listing a property on the MLS. NAR argues that the lawsuits misrepresent association rules as anticompetitive. The rules direct listing brokers to determine, in consultation with their clients, the amount of compensation offered to a buyer’s agent in connection with their MLS listings. Further, NAR says buyer’s agents are free to negotiate compensation with the listing broker that is different from what appears in the MLS. Neither NAR nor the MLS has any say in setting broker commissions.

“The U.S. model of independent, local broker marketplaces is widely considered the best value and most efficient model in the world, with no hidden or extra costs and with more complete, verified information compared to other countries,” Williams said. “We look forward to arguing our case in court.”

The Federal Reserve on Wednesday again held benchmark interest rates steady amid a backdrop of a growing economy and labor market and inflation that is still well above the central bank’s target.

In a widely expected move, the Fed’s rate-setting group unanimously agreed to hold the key federal funds rate in a target range between 5.25%-5.5%, where it has been since July. This was the second consecutive meeting that the Federal Open Market Committee chose to hold, following a string of 11 rate hikes, including four in 2023.

The decision included an upgrade to the committee’s general assessment of the economy.

“The process of getting inflation sustainably down to 2% has a long way to go,” Fed Chair Jerome Powell said in remarks at a news conference. He stressed that the central bank hasn’t made any decisions yet for its December meeting, saying that “The committee will always do what it thinks is appropriate at the time.”

Powell added that the FOMC is not considering or even discussing rate reductions at this time.

He also said the risks around the Fed doing too much or too little to fight inflation have become more balanced.

Governor Tony Evers filed a lawsuit against Republican state lawmakers Tuesday, claiming their decisions to block pay raises for employees of the Universities of Wisconsin, conservation projects and updates to the state’s commercial building standards are unconstitutional.

The lawsuit, filed by Democratic Attorney General Josh Kaul on behalf of Evers, along with a host of state agencies and boards, also focuses on GOP actions to block 27 conservation projects funded through the Knowles-Nelson Stewardship Program. Evers’ lawsuit also argues Republicans overstepped their authority on administrative rules related to commercial building standards and ethics standards for social workers and counselors.

The case claims GOP lawmakers are violating the Wisconsin Constitution’s “well-defined separation of powers” by creating more and more “legislative vetoes” made by committees made up of a handful of legislators.

Evers’ administration is petitioning the Wisconsin Supreme Court to take the case as an original action, effectively asking the court’s new liberal majority to bypass lower courts.

In a statement responding to the lawsuit, Assembly Speaker Robin Vos, R-Rochester accused Evers and Kaul of “an attempt to eliminate” raises given to all state employees by the Legislature.  “In a time of unprecedented inflation brought on by reckless Democrat spending, we think it is abhorrent that the Governor would try and take away lawfully approved money for hardworking state employees,” Vos said.

State Senate Majority Leader Devin LeMahieu, R-Oostburg, said the Senate would defend the duties of the Legislature and called Evers’ lawsuit “frivolous.”

“The Governor is working to diminish the the voice of Wisconsinites by limiting the authority of the legislature and unduly strengthening his own administration,” LeMahieu said.

The rise in compensation reported on Tuesday by the Labor Department was slightly stronger than expected and helps to explain the surge in consumer spending last quarter, which contributed to the fastest economic growth pace in nearly two years.

Wages increased 1.2% in the third quarter after climbing 1.0% in the prior three months. They were up 4.6% on a year-on-year basis after advancing by the same margin in the second quarter. Wage growth continues to exceed pre-pandemic rates.

Private-sector wages gained 1.1% after rising 1.0% in the April-June quarter. They advanced 4.5% on a year-on-year basis.

State and local government wages shot up 1.8% after increasing 0.8% in the prior quarter. They were driven by rises in education and health services as well as public administration. State and local government wages increased 4.8% on a year-on-year basis.

Inflation-adjusted wages for all workers rose 0.9% on a year-on-year basis after jumping 1.7% in the second quarter. Benefits rose 0.9% last quarter after climbing by the same margin in the April-June period. They increased 4.1% on a year-on-year basis.

Freddie Mac reported Thursday that the average rate for the benchmark 30-year fixed mortgage has now hit 7.79%, up from 7.63% last week and from 7.08% a year ago.

The rate for a 15-year mortgage also climbed, averaging 7.03% after coming in last week at 6.92%. One year ago, the rate on a 15-year fixed note averaged 6.36%.

This is the seventh week in a row that rates have risen, marking the longest stretch of consecutive increases since spring 2022, Freddie Mac said.

Redfin estimates there will only be roughly 4.1 million sales of existing homes across the nation by year’s end due to persistently high mortgage rates and elevated home prices amid low inventory, which are causing prospective buyers to reconsider their plans.

The real estate brokerage also reported that 16.3% of home purchase agreements in the U.S. were canceled last month, the highest rate in nearly a year.

Yesterday, Governor Tony Evers announced the appointment of 30 members to the Governor’s Task Force on Workforce and Artificial Intelligence (AI) and set the first public task force meeting for Monday, October 30, 2023.

Administered by the Wisconsin Department of Workforce Development (DWD) in coordination with the Wisconsin Department of Administration (DOA) and Wisconsin Economic Development Corporation (WEDC), the task force is bringing together private and public sector leaders to identify policies and investments that will continue to advance Wisconsin workers, employers, and job seekers through this technological transformation.

Appointees to the Governor’s Task Force on Workforce and Artificial Intelligence are:

• Amy Pechacek, Secretary, DWD;
• Kathy Blumenfeld, Secretary, DOA;
• Missy Hughes, Secretary and CEO, WEDC;
• Dr. Jill Underly, State Superintendent, Wisconsin Department of Public Instruction;
• Jay Rothman, President, UW System;
• Dr. Morna Foy, President, Wisconsin Technical College System;
• Troy Streckenbach, County Executive of Brown County;
• Trina Zanow, Chief IT Officer, DOA;
• Dr. Charles Lee Isbell Jr., Provost, UW-Madison;
• Greg Cisewski, Dean, School of Agricultural Sciences, Utilities & Transportation, Northcentral Technical College;
• Dr. Gholamreza Dehnavi, Department Chair, Department of Electrical and Computer Engineering, UW-Platteville;
• Dr. Kaushal Chari, Dean of Sheldon B. Lubar College of Business, UW-Milwaukee;
• Dr. Xuedong (David) Ding, Associate Dean for the College of Science, Technology, Engineering, Mathematics and Management, Director for School of Engineering, UW-Stout;
• Jeffrey Morin, President, Milwaukee Institute of Art & Design;
• Stephanie Bloomingdale, President, Wisconsin State AFL-CIO;
• Jack Salzwedel, Board Chair, American Family Mutual Insurance Company;
• Jeff Yabuki, Chairman, Motive Partners;
• Nadiyah Johnson, CEO, Milky Way Tech Hub;
• Karl Reichenberger, Chief Intellectual Property and Information Technology Counsel, Johnson Controls;
• Mark Tyler, Chairman, OEM Fabricators Inc.;
• Ann Franz, Executive Director, NEW Manufacturing Alliance;
• Levi Felling, Chief Technology Officer, Elite EXTRA;
• Jeri Koester, Chief Information and Digital Officer, Marshfield Clinic Health System;
• Israel Squires, Managing Partner, Midpoint Ventures;
• Chris Hein, Director of Customer Engineering, Google Public Sector;
• Dr. Keyanna Conner, Managing Director, Deloitte Consulting;
• Tim Fiocchi, Senior Director of Governmental Affairs, Wisconsin Farm Bureau Federation;
• Dave Mickelson, Member of Wisconsin Farmers Union;
• Brian Foster, Chief Operating Officer, Jeff Foster Trucking Inc.;
• Tyler Clark, U.S. Government Affairs Industry Director, Microsoft;

The first meeting of the Governor’s Task Force on Workforce and Artificial Intelligence is set for Mon., Oct. 30, 2023, from 1 to 4:30 p.m. with virtual and in-person meeting options. The in-person event will be held at the Concourse Hotel and Governor’s Club, 1 W. Dayton St., Madison, WI 53703. Register for attendance and choose attendance for one of three subcommittees via Eventbrite.

The three subcommittees are:

• Industries, Occupations, and Skills: This subcommittee will delve into the industries, occupations, and functional skillsets most likely to benefit or experience disruption from AI. Both employee and employer needs will be addressed.
• Equity and Economic Opportunity: This subcommittee will focus on advancing equity and economic opportunity as part of the AI transformation.
• Workforce Development and Educational Solutions: Based on the work of the previous two groups, this subcommittee will identify policy, educational, and budget solutions to prepare Wisconsin’s workforce, drive economic development, and sustain thriving communities.

Featured speakers at the October 30th meeting include: DWD Chief Economist Dennis Winters; Caroline Yap, Managing Director, Google Global AI Business; Emily Rose McRae, Senior Director Analyst, Gartner; and Tyler Clark, U.S. Government Affairs Industry Director, Microsoft.

Learn more about the task force, sign up for future notifications, and track ongoing work at DWD’s web page here.

Yesterday, Congressman Mike Johnson (LA-04) was elected as the Speaker of the House. As a Congressman, Speaker Johnson represents the northwest and western regions of Louisiana. Prior to his election to Congress in 2016, Speaker Johnson was an attorney and served in the Louisiana State Legislature from 2015 to 2017.

Elected by the whole of the House of Representatives, the Speaker acts as leader of the House and combines several roles: the institutional role of presiding officer and administrative head of the House, the role of leader of the majority party in the House, and the representative role of an elected member of the House. The Speaker of the House is second in line to succeed the President, after the Vice President.