By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It's Friday so "It's Only Money," a review of the big and not-so-big stories of the week. I'm Maxine Shapiro with KERA Marketplace Midday.
You were up for review in your job last month. For the past six months, you've been counting on the raise. You rehearsed how you would ask for it with your spouse, kids and even your dog. You were ready. But April comes and everywhere you turn, you read and hear how weak the labor market is. How can you even think of rocking the boat with so many unemployed people willing to do what you do for less? Join the club. Personal income was flat in April, and consumer spending was actually down - which is in direct correlation with consumer income. We've been spending during all the bad times. If we stop now... But today, Wall Street really doesn't care that about 70% of the economy is fueled by consumer spending. Based on a significant report, manufacturing is up in Chicago. It may be a signal of recovery in the second half of the year.
In fact, the stock market has been slowly rising since mid March. The Dow is flirting with year-to-date highs and the NASDAQ is where it was in June 2002. And more and more investors are getting out of the secure - but very low-return - money market funds. According to U.S. Bancorp Piper Jaffray, money market funds saw an outflow of almost $17 billion last week. So where's the money going? Back into equities, but not U.S. equities. Almost $3 billion went into International and Global funds. It's the institutional investor, the big boys that have been moving the U.S. markets. Most of the rest of us are still waiting.
And if you are currently enrolled in one of our fine higher education institutions and you had to take out a federally-funded loan to attend, here's some great news: starting July 1st, interest rates will drop to historic lows. Now let's say you're planning to attend a Texas college or university. Be prepared. The state legislature is allowing those institutions to raise tuition more than 50% in the next two years. One giveth and one taketh away.
For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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