US financial news | Summary news 12 October
Headlines: Thursday, 12 October 2023
- The Social Secuirty Adminstration announces 3.2% 2024 COLA
- CPI data shows core inflation dropping. How will Fed react?
- The US unemployment rate held steady at 3.8 percent in September
- Gas prices are dropping in the US, how low will they go?
- Thrifty Food Plan adjustment for SNAP benefits goes into effect
- The SSA will announce the 2024 Cost-of-living adjustments (COLA); forecasts estimate the COLA will be around 3 percent.
- States delivering checks and refunds in October
- 125,000 more borrowers become eligible for student loan forgiveness after the White House announced an additional $9 billion in debt relief.
Amazon’s worker safety hazards under fire from regulators and DOJ
Amazon warehouse staffers have long complained about unsafe working conditions and injury risks when rushing to fill packages and deliver them to customers in two days or less.
While Amazon claims its injury rate is coming down, data released last month from the Labor Department’s Occupational Safety and Health Administration shows that in 2022 Amazon laborers were injured at a rate of 6.9 for every 100.
In January, OSHA investigators cited Amazon for “failing to keep workers safe,” per CNBC.
California is one of the states with a minimum wage higher than the federal rate and one of the highest in the country, behind only the District of Columbia and the state of Washington.
Currently, the base salary in California is $15.50 per hour, and next year it is set to increase even more. There is an initiative in the state to increase the minimum wage to $18 per hour.
IMF hopeful about US economy
Americans may not be feeling very optimistic about the country's economy, but there is some good news. The International Monetary Fund has upgraded its economic growth forecast for the US while lowering its outlook for the euro area and China.
The IMF now expects the economy to grow 2.1% this year and 1.5% in 2024, up from forecasts of 1.8% and 1%, respectively, in July.
JP Morgan CEO warns of effects of Middle East violence
The conflict in the Middle East will have "ripple effects that extend far beyond the region", JPMorgan Chase's CEO Jamie Dimon warned in an internal memo to employees seen by Reuters.
The deadliest attack on civilians in Israeli history on Saturday has led to a dramatic escalation of violence in the region. The Israeli death toll has risen to more than 1,300, according to public broadcaster Kan, while Gaza authorities said more than 1,400 Palestinians have been killed.
The attack could prompt "an increase in antisemitism and Islamophobia around the globe", Dimon said, adding that the bank was working closely with the US and international government agencies to guarantee the safety of its employees.
After the Bureau of Labor Statistics shared the latest Consumer Price Index for Urban Wage Workers and Clerical Workers or CPI-W data needed to calculate the cost of living adjustment, the SSA announced that the COLA for next year will be 3.2%.
This percentage will apply to all Social Security benefits, including those for retired workers, survivors, and Social Security Disability Insurance.
It will also benefit those who receive payments from the Supplemental Security Income program.
Trick-or-treating will be costly this year
In September, the cost of sugar and sugar substitutes was up 7.7% compared to a year ago, while candy and chewing gum jumped 7.5%. Prices of other sweets rose nearly 3% compared to last year, according to the Bureau of Labor Statistics' latest Consumer Price Index.
That's higher than overall food inflation, which increased 3.7% year over year.
Despite the rise in prices, consumers are expected to spend $3.6 billion dollars on candy this year, a nearly 14% jump from last year's total of $3.1 billion. That figure is an all-time high, according to the National Retail Federation. Consumer spending on candy, costumes, and decorations is projected to reach $11 billion.
Food inflation slows again in September
The US Bureau of Labor Statistics released its September Consumer Price Index (CPI) report on Thursday. While month-over-month headline inflation was slightly above expectations coming in at 0.4%, core inflation hit the mark. Year-over-year the full CPI held steady at 3.7% but core CPI, minus volatile energy and food prices, came in at 4.1%, down from 4.3% in August.
Food inflation continued to drop year-on-year in September now at 3.7% compared to 4.3% the month before. Month-over-month food at home prices rose 0.1%, slightly less than August’s, and 2.4% in the 12 months from September 2022. Month-over-month inflation for food away from home ticked up from August going from 0.3% to 0.4% in September with an annual increase of 6%, down from 6.5% the month before.
The index for cereals and bakery products declined on a monthly basis for the first time since June 2021 currently 4.8% higher than a year ago. Dairy and related products decreased 0.2% over the year. The remaining major grocery store food groups posted increases ranging from a 0.2% rise for meat, poultry, fish, and eggs, to 4.2% jump for other food at home.
As bank customers move online and make fewer trips to their local branches, many national financial institutions are closing down locations. This is not a new trend. Insider Intelligence reported that between 2017 and 2021, nine percent of all branches — around 7,000 locations— shut their doors.
The branches currently being shut are typically found in cities where another location exists, leaving customers with an office in case they require in-person assistance.
The 2024 COLA has been released and it will affect all payments sent next year by the Social Security Administration.
UAW ups pressure on Ford calling on 8,700 workers at largest factory to strike
On Wednesday evening, the United Auto Workers union surprised Ford when it told 8,700 workers at the company’s largest plant to lay down their tools. The latest action is a major escalation in the four-week-long strike.
“We have been crystal clear, and we have waited long enough, but Ford has not gotten the message,” said UAW President Shawn Fain. He says that he was at the car manufacturer’s Dearborn, Michigan headquarters to get another offer. However, it was the “exact same offer” as the one that was presented two weeks ago.
“In our position they are not taking us serious. We’ve been very patient,” said Fain. “So at this point we had to take action.” At 6:30 pm workers from the UAW Local 862 at the Louisville, Kentucky plant walked off the job.
Many young people in the United States are worried about the possibility of buying a home in the near future. The high cost of real estate, combined with salaries that have not kept pace with prices in the housing market, makes acquiring property difficult. This is especially true in certain cities where the gap between income and housing prices is even greater.
For decades, major cities in the US have undergone a period of intense gentrification, driving up prices even further, and driving local communities who had lived in these neighborhoods to more affordable options. Those lucky enough to have owned their homes and been able to sell may have been able to purchase in a cheaper housing market, but today, those are few and far between.
Realtor.com carried out a study that examined the increases in property prices over the last twelve months in the United States to identify the ten markets where prices have risen most.
While it might be tempting to take a shot at the massive jackpots on offer purchasing a ticket with your credit card it could cost you a pretty penny.
Some beneficiaries may see their SNAP benefits increase this month. When will the adjusted benefits be delivered?
The federal government released latest data on US inflation on Thursday showing that price increases have cooled. How will it affect the Fed’s rate policy?
In order to calculate your benefit amount, multiply 1.032 by your current benefit amount. For instance, if your monthly payment is $1,840, the current average payment for retired workers according to the SSA’s monthly snapshot in August 2023, we would multiply that figure by 1.032, which equals almost $1,899, an increase of nearly $59.
The cost of living adjustment (COLA) increase for 2024 has just been announced. It is 3.2%, as had been expected by analysts, meaning government programmes will be increased by this amount for 2024.
A projection made by The Senior Citizens League, one of the largest nonpartisan senior groups in the United States, had anticipated that the increase to COLA for 2024 would be 3.2 percent
The COLA increase has been released
It is significantly smaller than the increase for this year
The increase to the COLA is made based on the annual increase in the Consumer Price Index for Salaried Workers in Urban Areas and Administrative Workers (CPI-W).
To determine this, SSA compares the CPI-W for the third quarter of the year - July, August and September - that is prior to the CPI-W for the third quarter of the current year. The difference between one and the other will be the equivalent of the increase in COLA.
For 2023 the increase was 8.7%, which was the biggest increase in four decades.
Social Security beneficiaries will be able to see an increase in their monthly payments starting in 2024 thanks to the increase in the Cost of Living Adjustment (COLA).
Year after year, the Social Security Administration (SSA) makes an increase to the COLA with the goal of equalising beneficiary payments with the inflation rate in course. In this way, acquisitive losses are avoided for the beneficiaries when the inflation rate is high.
The COLA is calculated by comparing the Consumer Price Index for Salaried Workers in Urban Areas and Administrative Workers (CPI-W) of the third quarter of the current year with that of the third quarter of the previous year. The difference between one and the other is the increase in COLA.
Read more on the 2024 COLA, which will be announced tomorrow.
The state of Colorado continues to send property tax/income/heat credit (PTC) rebates which amount to up to $1,044 to some of its residents. The 2022 PTC refund is available to qualified residents who lived in Colorado from January 1 to December 31, 2022.
Find out who are eligibleto receive the payment on October 15.
Are interest rates hikes finally coming to an end?
Federal Reserve policymakers are optimistic that a rise in long-term Treasury yields could finally put an end to the past 19 months of historic interest rate hikes meant to rein in inflation.
Wall Street is also feeling hopeful that there won’t be further tightening of monetary policy. The odds of another interest rate hike by the Fed in November are falling, according to the CME FedWatch Tool.
This month, millions of Californians will receive up to $70 in credit to pay their electricity bills. This subsidy is thanks to the California Climate Credit, which is part of the state’s efforts to fight climate change.
Find out how this subsidy works, and what to do if you do not receive yours.
Americans spending some $65 billion in junk fees
President Joe Biden has announced the government will be cracking down on junk fees. According to the White House, Americans are collectively spending nearly $65 billion on sneaky fees.
These so-called 'junk fees' include bank fees, as well as fun and home fees.
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Later today, the Social Security Adminstration will release the 2024 Cost-of-living adjustment (COLA), which will be applied to Social Security benefits and the other programs administered by the SSA. We will bring you the latest forecasts, but beneficiaries should be prepared that the figure is likely to be less than half of the 8.7 percent that was granted this year.