Inflation relief checks by state news summary | 3 November 2022
Inflation relief: live updates
Headlines: Thursday, 3 November 2022
- BLS will release October Employment Report tomorrow, Friday 5 November.
- Student loan borrowers who paid down debt during the moratorium to get refund checks
- Fed announces fourth straight 0.75% interest rate hike today, mortgages expected to get more expensive
- Inflation in Europe hits record high of 10.7%
- The economy and healthcare costs are a top concern for midterm voters.
- US registers 2.6% GDP growth in Q3
- NYC salary transparency law to take effect 1 November
- Mortgage rates fall below 7% after reaching 20-year high
- California confirms the next round of inflation relief checks was sent out on Friday
- Some still may be eligible to receive the $3,600/$3,000 child tax credit
- Final deadline to claim stimulus checks approaching
- The student debt forgivenessapplication deadline, when is it?
Who is eligible to request unclaimed stimulus check payments and when is the deadline?
Time is running out to claim federal stimulus checks. If you beleive you were eligible and still have not filed a 2021 tax return, you can do so and you may be able to receive a stimulus check worth $1,400. More funds are distributed to families, so make sure to claim any dependents within your care.
Federal Reserve increased rates even further
Chairmen Jerome Powell held a press conference after announcing another .75 percent increase in the central bank's interest rate in an attempt to slow inflation. However, with many supply chain issues, particularly an unwillingness of oil and gas companies to increase capital expenditure to boost production, many fear that higher rates may not solve the price problem.
Currently, the Fed's two mandates to create the conditions that would allow for maximum employment and keep inflation at below two percent, have begun to conflict. With unemployment hovering at historic lows and prices off the charts, the Fed has said that softening the labor market (i.e., increasing unemployment) may be needed to bring inflation back under control.
Many labor organizers have critiqued these plans as overly punitive to workers who could lose their jobs, while corporations across good markets rake in record profits. These tensions have begun to highlight the weakness of monetary policy when it comes to the interventions in the economy, a conversation that is sure to continue as the impacts of higher rates take effect.
The key date of the SSA notice with the COLA increase: $1,752 average in 2023
Households across the nation reeling from rising prices that receive Social Security benefits will get a big boost to their finances come the new year. The Social Security Administration announced its 2023 COLA and it was a whopper. At 8.7 percent, it is the fourth largest in the history of the annual cost-of-living adjustments and the biggest since 1981.
The average recipient of retired worker benefits will see a monthly payment of $1,827 an increase of $146. That will translate into an extra $1,752 over the course of 2023. The Social Security Administration will begin sending out notices in the mail to beneficiaries of exactly what their monthly payments will be next year.
The key dates to receive the California inflation relief checks: who will collect it in October?
It's been over two weeks since payments of California’s inflation relief checks started to be sent out to residents. Payments are going out as either direct deposit or debit cards, both formats have their own payment schedules.
Low-cost internet initiative to boost connectivity
In May, President Biden announced that 20 internet providers, including AT&T, Comcast and Verizon, have committed to the Affordable Connectivity Program (ACP). The program is designed to ensure access to high-speed internet service for no more than $30 per month, for eligible households. Roughly 80 percent of Americans live in communities where these providers operate.
The program also provides eligible households $30 per month off their internet bills, so families can receive high-speed internet at no cost when paired together. To check your eligibility, head over to the Affordable Connectivity Program website, or call (877) 384-2575.
Last month, I launched the application for our Administration’s student debt relief. Close to 26 million Americans have already given us the information to be considered for this life-changing relief. And, as of this week, @usedgov will have approved 16 million applications.
Inflation knows no borders
Inflation has been battering household finances across the US, but Americans are not alone. Rising prices have been causing havoc for governments around the world and set central bankers scrambling to put a lid on it. Policy makers have been instituting aggressive rate hikes to tighten monetary policy in their jurisdictions not seen in decades.
The Bank of England just announced a 0.75% interest rate hike on Thursday increasing the rate to 3% from 2.25%. That’s the biggest rise in rates since 1989 and has warned of a "very challenging" outlook for the economy, with the economy registering 10.1% inflation in September. The economy is already in a recession which could last two years.
The European Central Bank jacked rates by the same amount at the end of October to 1.5%, its highest level since 2009. The ECB hasn’t raised rate so aggressively since the beginning of the eurozone in 1999. Inflation accelerated to 10.7% across the economic bloc in October.
The US got an earlier start than its trading partners in attempting to tackle rampant inflation, kicking off with a series of rate hikes in March this year. While starting slowly with a 25 basis points rise, the first in two years, the Fed just announced its fourth straight 75 basis points hike on Wednesday.
Inflation in the US has been slowly coming down since peaking at 9.1% in June, it still sits at 8.2 percent. So far the US has been able to avoid recession with the economy expanding in the third quarter after two straight declines.
Hiking interest rates won't stop inflation
Inflation has been rising despite people spending less in the last six months. Rising interest rates will put further stress on Americans, using a blunt instrument in an attempt to hit inflation. While inflation grows, so have corporate profit margins. Whether this is justifiable or not is up to you.
Former secretary of labor Robert Reich agrees that profiteering is behind the inflation rate, not spending. This is further evidenced by higher inflation in the UK and Eurozone compared to the US, despite neither group having spending programmes such as stimulus checks.
Mortgage rates rise
Americans have been battered by rising prices at the pump, in the supermarket and for those buying a home, mortgage rates that have rocketed at the same time housing prices continue to surge.
The 30-year fixed-rate mortgage averaged 7.30 percent as of 3 November, the highest it’s been in 20 years. Although homebuyers are feeling the pinch, rates had been historically low, just 2.93 percent a year ago.
How big is the FED rate interest hike and how will it affect loans and mortgages?
The most affected so far by the interest rate hikes has been the housing sector with activity slowing in many markets across the nation.
Last week the rate on the most common mortgage, a conventional thirty-year fixed-rate mortgage, jumped above 7% for the first time in 20 years.Rates have risen steeply, rocketing up from below 3% in July 2021, as the Fed has moved to quell inflation. Additionally, homebuyers have been confronting ever increasing prices on houses, jumping from a national average of $473,000 to $542,000 in the span of a year, a nearly 15% increase, according to the St Louis Federal Reserve.
Well, it's predictable. I wasn't the only one that thought it was a mistake. I think that the idea of cutting taxes on the super wealthy at a time when - anyway, I just think - I disagreed with the policy, but that's up to Great Britain to make that judgment, not me.
Our economy is strong as hell - the internals of it. Inflation is worldwide. It's worse off everywhere else than it is in the United States. So the problem is the lack of economic growth and sound policy in other countries, not so much ours.
Not just the US struggling economically
Off the back of roundly criticised economic policies and decisions such as Brexit, the UK economy is in freefall. Record inflation has led to interest rate hikes on the scale of the Federal Reserve. However, unlike the US (at this stage anyway) the British economy is already in recession, one that is predicted to last for a minimum of two years.
Federal Reserve moves to squash inflation, increasing risk of inflation
The Federal Reserve began raising interest rates last March to slow rising inflation in the US economy. After easing into its first rate hike in two years with a quarter of a percentage point increase, policy makers went full throttle, first with a half percentage point hike, then three straight 75 basis point increase before they met this week as inflation continued to stay persistently high.
The jump in overnight rates for lending have had the knock-on effect of raising the cost of borrowing for businesses and ordinary Americans.
Weekly domestic oil production in US drops below 12 million barrels
US domestic oil production had been making gradual gains to recover its peak of over 13 million barrels per day before the pandemic saw demand for Texas tea crater and with it the national suppliers output. From bottoming out at 9.7m bpd in August 2020, production had reached in fits and starts around 12.2m bpd in early August this year.
Since then there has been a gradual decrease of what producers are pulling out of the ground slipping to 11.9m bpd in the last week of October according to recent US Energy Information Agency data.
What did Joe Biden say about oil companies and their record profits?
Consumers in the west have been hit by spiralling fuel costs from the Russian invasion of Ukraine. The closing of oil and gas pipelines from Russia to Europe was particularly serious as Russia was the largest fuel supplier for many European countries.
Nations have not been helped by the apparent backing of russing by OPEC, the oil production union of nations. It has scaled back production further driving up prices and leaving President Biden red-faced as he went to Saudi Arabia cap in hand a week prior to the decision. The shortness of supply has given oil companies the opportunity to hit record profits.
Bumper storage injections bring down price of natural gas
Prior to the pandemic the US averaged 92.9 billion cubic feer per day in 2019 before dropping as demand slowed in 2020. However, production has come surging back to meet demands for Liquified natural gas exports, exceeding 97 Bcf/d every day in September and surpassing 100 Bcf/d on seven days.
The substantial increase in production has allowed for larger underground storage injections, 427 Bcf in September accounting for 21% of the total, which has brought down the spot price.
You can get a refund for any payment (including auto-debit payments) you make during the payment pause (beginning March 13, 2020).
Borrowers have always been able to request payments made during the Covid freeze to be refunded assuming their loans were eligible for the freeze in the first place, which most federal loans are.
How to get refunds if you made student loan payments during covid-19
For people who are eligible for debt forgiveness nothing needs to be done. The refund will be automatically calculated and sent.
For those not having their debt automatically adjusted, students will need to call their loan servicer. This includes people who paid off their student debt during the pandemic as well as people who refinanced their debt.
Keep in mind that any refund will still need to be paid off in future; this isn’t another form of cancellation. However, these measures will apply to very few people. According to data from the Department of Education only 1.2 percent of borrowers continued to pay back their student loan during the pandemic.
Those who paid down student loan debt during moratorium getting refund checks
Around 8.8 million borrowers tried to make headway on paying down their student loan debt during the moratorium on payments and interest. The pause on student loan payments was implemented in March 2020 and has been extended several times since.
However, the holiday will be coming to an end soon, expiring 31 December 2022. Millions of borrowers were hoping to take advantage of President Biden's annouced federal student loan forgiveness program.
The program came to a screeching halt though when some 22 million had already signed up after an injunction was imposed by the courts due to a lawsuit from a handful Republican states. Good news though for those that paid down their debt during the moratorium.
Bloomberg reports that despite the injunction, they will be receiving refunds as part of the covid-19 relief stimulus program.
Unemployment drops further across the US
The three states with the lowest unemployment rate in September 2022 were Minnesota (2.0 percent), Vermont (2.1 percent), and Utah (2.1 percent).
On the other end of the spectrum, Washington, DC (4.7 percent) and Illinois (4.5 percent) are seeing the highest rates of unemployment.
The majority of states are in the middle, with twenty-eight states recording a rate under 3.5 percent.
The Federal Reserve projects increases in unemployment nationally by the end of the year, this Friday's report on October will provide an indicator if that trend has begun to happen or not.
Inflation relief news from AS USA!
Good morning and welcome to AS USA, where we will be bringing you the latest financial news and information from the United States. We have updates on the inflation relief checks being distributed in parts of the country and news on the latest GDP figures.