April PPI report and financial news summary | 11 May 2023
Headlines: Thursday, 11 May 2023
- Donald Trump argues that Republicans should force Democrats to cut $5 trillionin federal spending in CNN Townhall
- Producer Price Index "advances" 0.2 percent in April
- Prices for summer travel are likely to be lowerthis year compared to last
- Inflation rose 0.4 percent in April, leading to a year-over-year increase of 4.9 percent
- Negotiations continue in Washington DCover raising the debt ceiling
Read more from AS USA:
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Want to work remotely? Check out these cities
The pandemic paved the way for companies to make working from home an option for many employees. Now that some workers are being asked to go back to the office, many are looking elsewhere for jobs where they can do their work remotely.
Some cities in the northeast have made it to the list of top ten cities with the most remote job opportunities, such as Bloomfield, Connecticut; Augusta, Maine; and Dover, Delaware.
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Two states in the US are sending payments and tax refunds to their residents: Alaska and Georgia. In the case of the former, they are sending out the Permanent Fund Dividend. In Georgia, the government has started sending a refund thanks to the budget surplus.
Find out from this report what you need to qualify for the benefit.
Walmart takes fintech plunge into Mexican market
Retail giant Walmart wants to get on top of Mexico's fintech market with its Cashi digital wallet, yet analysts say its drive is lined with potential pitfalls due to the proliferation of risky clients in the largely untapped market.
Walmart de Mexico (Walmex) in April said it had bought Trafalgar, a payment app, to compete in a market dominated by Grupo Salinas' Baz, Oxxo's Spin and MercadoPago of MercadoLibre.
Executives at the Walmart unit expect the deal to "unlock Cashi's potential," starting with transfers, withdrawals and remittances while keeping open the option of loans and other financial services in the future.
"We want to be the best financial services application in Mexico, and that requires constant investment," according to Marcelino Herrera, Walmex senior vice president of financial services.
(REUTERS)
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On July 1, the new immigration law will take effect in the state of Florida. The measure was proposed and approved by Governor Ron DeSantis in response to the migration crisis on the country’s southern border.
This new legislation was signed by DeSantis last Tuesday, just two days before Title 42 is due to be finalized. Through this law, companies must comply with new requirements to hire migrants.
Our coverage details how the new immigration law will affect businesses that hire migrant workers in Florida.
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A handfull of residents in California are set to receive their first guaranteed income payments in the coming day. Come 15 May, 30 residents in Palm Springs will receive the first of their $800 checks, which will continue for 18 months until November 2024.
The non-profit organizations Queer Works and DAP Health are responsible for championing this new program with half a million dollars of funding from the city of Palm Springs.
The changing food prices this year
According to figures from the United States Department of Agriculture, these were the foods that increased in price the most between April 2022 and April 2023:
Margarine: +23.8%
Eggs: +21.4%
Frozen vegetables: +18.9%
Flours and mixes of prepared flours: +17.8%
Cookies: +15.9%
Beef, veal and pork also rose considerably, although not to the level of the listed products. The fall in food inflation began to be noticed more significantly during the last quarter of 2022, especially in beef, pork and fresh fruits.
The indices that decreased the most from March to April include: oranges and mandarins (-3.8%), frankfurter sausages (-2.9%), citrus (-2.7%), bacon and related products (-2.2%) and fresh whole milk (-2.1%).
Residents of the US have had to carefully watch what they have been purchasing due to high levels of inflation. In June 2022, this reached its highest rate in decades with year-on-year inflation reaching a mighty 9.1 percent.
This rate has been declining. According to data from the US Bureau of Labor Statistics (BLS), the rate last month fell to 4.9 percent. As this is the inflation data for all products, food only plays a part in the data and is in fact increasing at a rate higher than the average.
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Due to inflation, several states in the US approved the sending of stimulus checks or tax refunds as relief last year. Since then, inflation has fallen; however, financial support continues in certain locations, with payments up to $1,500.
Read our full coverage for details on where these checks are being sent and who is eligible.
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In April, the IRS announced that nearly 1.5 million people nationwide were still eligible to receive a tax refund worth up to $900. Who is it for?
The IRS estimates that nearly $1.5 billion in refunds remains unclaimed because people have yet to file their 2019 tax returns. According to the IRS, the average refund size is $893.
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Residents of California, particularly those living in Palm Springs, have been chosen to participate in a guaranteed income program. Under this program, eligible individuals will be able to receive a monthly payment of $800 if they apply to the new pilot program that intends to implement a universal basic income.
Initial unemployment claims increased last week to 264,000
Last week, initial unemployment claims hit 264,000, an increase of 22,000 compared to the level recorded a week earlier. While unemployment dropped to 3.4 percent in April, this figure for initial claims represents the highest number since 30 October 2021.
Which states are seeing initial claims increase?
For the week ending on 29 April, new claims were highest in Massachusetts (+3,801), Kentucky (+3,659), Pennsylvania (+992), Virginia (+896), and Colorado (+726). States that saw the greatest fall in new claims were: New York (-9,456), Illinois (-2,693), Georgia (-1,278), New Jersey (-783), and Ohio (-505).
Domestic producers saw selling prices rise 0.2 percent in April
The Producer Price Index for final demand advanced 0.2 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.4 percent in March and were unchanged in February. On an unadjusted basis, the index for final demand moved up 2.3 percent for the 12 months ended in April. In April, 80 percent of the rise in the index for final demand is attributable to a 0.3-percent increase in prices for final demand services. The index for final demand goods advanced 0.2 percent. Prices for final demand less foods, energy, and trade services rose 0.2 percent in April after inching up 0.1 percent in March. For the 12 months ended in April, the index for final demand less foods, energy, and trade services increased 3.4 percent.
During CNN’s town hall with Republican frontrunner Donald Trump, the former president was asked his thoughts on the country’s debt “situation” and how to “move forward.”
To the surprise of many watching at home, Trump told Republican leaders on Capitol Hill that “if [the Democrats] don’t give you massive cuts, you are going to have to do a default.” Trump explained that the threat of defaulting represents such a grave threat to the economy that the Democrats will cave to the GOP’s demands. Trump relied on GOP talking points, arguing that the debt limit should not be raised because Democrats are spending like “drunken sailors.”
Read our full coverage on the details of Trump's argument to demand $5 trillion in spending cuts from Democrats.
White House responds to April Consumer Price Index report
With today’s report, annual inflation has come down 45 percent since last summer. The annual inflation rate has now come down 10 months in a row at a time when our economy and job market are strong, with the unemployment rate at its lowest level in more than 50 years. Gas prices are down nearly $1.50 from their summer peak, and prices at the grocery store have actually come down the last two months, providing some welcome breathing room for families. While we have more work to do to lower costs for families, the President’s Inflation Reduction Act is already working to lower the cost of prescription drugs, health care, and home energy costs. And with more than $400 billion in private sector manufacturing investments committed already, his Investing in America agenda is creating good jobs you can raise a family on in communities throughout the country.
Donald Trump Sparks Controversy by Urging Republicans to Let US Default on Debt
During a CNN Townhall, former President Trump spread lies, attacked the moderated, and used the opportunity to tell the GOP that they should let the US default if the Democrats do not agree to spending cuts.
No remarks on this plan have been made by Republican leaders.
Inflation increased 0.4 percent in April
The Federal Reserve announced earlier this month that it was considering slowing the pace of interest rate hikes, but after today's news from the BLS, those plans may be changing.
Housing drives inflation once again
The BLS tracked a 0.4 percent increase in average prices in April, with housing continuing to drive inflation. Shelter, which tracks the change in price of mortgages and rental payments, continues to be eight percent higher than the figures recorded last year. As interest rates increase, mortages become more expensive, which helps to explain one reason why prices have not fallen for these commodities. However, rental prices are 8.8 percent higher this year compared to last, and interest rate increases should not have such an impact on these prices since most mortgages are on fixed rates. If your mortgage rate is fixed, as opposed to variable, your monthly payment cannot increase, and thus there is little justification that can be used to pass along higher costs to tenants.
What other sectors are responsible?
Other sectors that contributed to the rise in prices came from the energy sector, with gasoline prices rising three percent between March and April. Additionally, used cars and trucks saw a four percent rise in average prices, which was the first time these commodities saw their prices rise in 2023.
The US is on the brink of its first-ever default this summer, as Congress and the White House continue its standoff on the issue of raising the debt ceiling.
The country owes trillions of dollars to foreign institutions, including governments, central banks, corporations, and other investors. Foreign governments own a big part of the public debt, which includes treasury bonds and other securities.
Hello and welcome to AS USA's live blog on finance and economic news.
Today, the BLS will release the Producer Price Index, which provides information on the costs of doing business in the United States. Additionally, later today, the Department of Labor will release the unemployment claims data for last week.
Yesterday, the agency reported that the Consumer Price Index rose 0.4 percent, leading to a year-over-year increase of 4.9 percent; down from 6 percent in March.
In Washington DC, Democrats and Republicans are negotiating over the debt ceiling. In a townhall on CNN, Donald Trump said that the GOP should let the country default and claimed that his party should force Democrats to cut $5 trillion of the federal budget.