Happy Wednesday everyone.
It’s the day after the midterm elections. Dust has settled on most major Michigan races, but I’m not here to talk politics (you can get all the election results here).
Instead, join me in examining the economy.
This is Wallet Watch: a weekly Wednesday series where my MLive colleague Lindsay Moore and I, Rose White, recap money headlines. Last week it was all about fuel prices – for your home and your car.
And this week, let’s check inflation. How is this guy?
Rents drop an inch
Races. Gasoline. Health care. Lodging. It is a year of inflation.
But there is a silver lining: rental prices are starting to fall across the country.
Nationally, rents are still up 8.8% from the same time last year, according to a monthly report from Rent.com, but fell 2.5% in September. In Michigan, they reached a median price of $1,321 – a yearly jump of 10.5% – and recorded a monthly increase of 1.36%.
“I don’t think we’ll see prices return to pre-pandemic levels given the magnitude of these increases,” said Jon Leckie, researcher for Rent.com. “I think we could see a bit more moderation and price cuts in the colder months.”
Rising interest rates cooled the housing and rental markets.
As a result, cities like Detroit, Grand Rapids and Ann Arbor are starting to see some rent relief.
Related: Rents fell slightly across the country. See how Michigan compares.
Some receive heating assistance
Heating bills will likely be high this winter.
But Michigan is helping by sending checks to some households to offset heating costs.
Nearly 210,000 Michiganders who received home heating credits in 2021 can expect to see a check in their mailbox. Households with elderly, disabled and children under 5 receive $575. All other eligible households receive $380.
“No one should have to choose between keeping the heat on or paying for other essentials like rent, prescription drugs or groceries, but far too many Michiganders face those kinds of choices,” Governor Gretchen said. Whitmer in a press release.
Checks have already been mailed to eligible households.
Related: Some Michigan households receive up to $575 for heating bills
High costs, high interest rates
Last week, the Federal Reserve raised interest rates for the sixth time this year.
That means it’s more expensive to get a mortgage, credit card interest is going up, and the stock market is changing.
Raising interest rates is the most powerful tool the federal government has to fight inflation. And we’ll see if that starts to have an effect when the new consumer price index comes out on Thursday morning. So far, consumer prices remain above 8% a year despite the Fed’s efforts.
In response to inflation, a chain of grocery stores lowers prices.
Aldi has announced that it will offer holiday favorites at pre-pandemic and pre-inflation 2019 prices. The Thanksgiving Price Rewind sale will run through November 29.
Related: Aldi rewinds prices to 2019 for Thanksgiving favorites amid inflation
Spending on electric vehicles is also increasing
Americans are spending more these days because of inflation.
Michigan also increased spending.
The state has pledged nearly $2 billion in public incentives this year to win five multi-billion dollar electric vehicle projects. It’s competing in what’s been called the biggest “megadeal spending spree” in US history as states pour billions into the race for electric vehicles.
Related: Michigan has won 5 major electric vehicle projects this year – at a cost to taxpayers of $2 billion
“Officials are really paralyzed during a classic game theory game called the prisoner’s dilemma where they can’t cooperate, they can’t know, they can’t talk to each other, they just have to put in as much money as possible on the table and hopefully it will work,” said Greg LeRoy, author of a report from watchdog group Good Jobs First.
Proponents say these big projects could transform local economies.
But critics say public funds would be better spent on housing, education and job training.
And now back to your regular programming, to the election results.
More from MLive:
Michigan 2022 Election Results: Governor, AG, SOS and Voting Proposals
Whitmer declares victory: ‘Michigan’s future is bright’
Dana Nessel re-elected Michigan attorney general, AP projects Wednesday morning
Benson re-elected SOS: “Democracy has won here in Michigan”
Proposal 1: Voters adopt plan to shorten terms and force politicians to disclose finances
Michiganders pass Proposition 2, amending state constitution to expand voting rights
Proposition 3 passes, enshrining the right to abortion in the Michigan Constitution