Inflation relief checks by state, news summary Saturday 5 November: Social Security payments, interest rates, unemployment

US NEWS

What did Joe Biden say about oil companies and their record profits?

Sky-high inflation has been a major concern for households across the United States in 2022 and President Biden looks likely to suffer in the midterms as a result. But in recent days Biden has come out fighting and pledged to impose windfall taxes on oil companies if their record profits continue.

Biden said that the oil industry “has not met its commitment to invest in America and support the American people,” adding that it's “profits [are] so high it is hard to believe.”

“Their profits are a windfall of war,” he said. “It’s time for these companies to stop war profiteering... If they don’t, they’re going to pay a higher tax on their excess profits, and face other restrictions."

Here's what Biden has in mind for the windfall taxes..

Mortgage demand slumps as rates rise

With inflation still running hot in the United States the Federal Reserve has implemented a number of rate increases to cool the economy. However these interest rate hikes have increased the costs of borrowing and made mortgages much more expensive. 

Mortgage rates for new 30 year agreements have, on average, risen to 7.3%, the highest figure recorded since 2000. As such, demand for mortgages across the country has slumped. 

Californians could get tax waiver on student debt relief

President Biden remains confident that his federal student loan forgiveness will go into action in the coming weeks, but under current rules some borrowers could be taxed on the relief received. Under federal law, the Biden initiative will not be subject to tax from the Internal Revenue Service, but California state law may treat it as taxable income. 

But changes are in the works to allow borrowers in California to keep the whole amount, up to $20,000 in student debt forgiveness for students from low-income households. 

“Californians who get student debt relief shouldn’t be hit with taxes for it,” said Gov. Gavin Newsom. “I look forward to working closely with the Legislature to get this done through early action.”

SOCIAL SECURITY

The key dates by state for the extension of food stamps: who collects SNAP in November?

Back in January, 37 states had signed up to make their residents eligible for extra SNAP benefits, as part of the Emergency Allotment (EA) program. However, for November this number has been reduced to 21 states.

The EA benefits do not apply to all recipients, but will instead be used to boost the entitlement of households who would not otherwise be eligible to receive the full amount. If you were not previously receiving the maximum entitlement for your house size then the EA benefits will increase your total monthly benefits.

These states will continue SNAP emergency allotments in November 2022.

What is the Republican plan to deal with inflation

The Democrats published a list of the American plans to deal with inflation, and they are not particularly pretty.

- $3 trillion in tax cuts skewed to the wealthy

- Repeal of prescription drug limits (from the recently passed Democrat bill)

- Cuts to clean energy spending

- Cancelling of student debt forgiveness

HOUSING COSTS

Which US cities have the highest down payments to buy a home?

According to LendingTree, a down payment on a home in the 50 largest metropolitan areas in the country averages $62,611. California is home to the three metropolitan areas with the highest down payments: San Jose, San Francisco and Los Angeles. The average down payment in San Jose is $142,006, while in San Francisco and Los Angeles, those figures are $131,631 and $104,749, respectively.

The average down payment in Washington D.C. it is $78,831, while in New York City it is $88,195.

FINANCIAL ASSISTANCE

$9,600 checks: When do they arrive and who is eligible?

The $9,600 checks will go only to residents of Coachella, California, through the city's Immigrant Families Recovery Program.

The total amount of aid will be divided into monthly payments over two years, resulting in payments of $400 per month. It is worth mentioning that the objective of the Program is to provide financial assistance to immigrants who were not eligible for federal aid due to covid-19.

Inflation and the midterms

The cost of food in the US is rising at the fastest pace since the 1970s, with grocery prices up 13.5% in the 12 months to September and wages are failing to keep pace.

For the Democratic base, polls suggest that inflation concerns have been overshadowed by the fight over abortion.

For Republicans, the economy remains key, especially as the price of gasoline has started to tick higher after dropping this summer.

US NEWS

How long will it take to process the student loan forgiveness application?

Millions of eligible Americans have already applied for the debt forgiveness via the online application form, with the latest figures at 26 million. Those that submitted an application before the full rollout will now have their applications processed which should have taken six weeks at the most. 

However, this timeline is out of the window for the moment. Attorneys for the states of Arkansas, Kansas, Iowa, Missouri, Nebraska and South Carolina brought a case that Biden is not able to authorise such widespread student loan forgiveness as it may impact the tax revenues of said states.

The US Court of Appeals for the 8th Circuit issued an administrative stay on payments while it reviews a lawsuit which is expected to be thrown out.

Justice Coney Barrett blocks second attempt to stop student loan debt forgiveness

Supreme Court Justice Amy Coney Barrett for second time has denied an emergency application to block President Biden’s student loan forgiveness plan. This time the request for an emergency stay came from two Indiana men, Frank Garrison and Noel Johnson, who said that the automatic forgiveness of their debt would cause them irreparable harm by leaving them with a hefty state tax bill.

Previously, the Justice had rejected another request to block the program filed by the Brown County Taxpayers Association in Wisconsin. They argued that it would cost taxpayers billions of dollars. Barrett has neither commented on the filing nor referred the matter to her other colleagues in both cases.

The program, however, is still on hold thanks to an administrative stay issued by the Eighth Circuit Court of Appeals while it considers a motion from six Republican-led states to block the program.

POTUS gives his thoughts on October jobs report

Today's jobs report shows we've added 261,000 jobs and maintained a historically low unemployment rate of 3.7% – our economy is strong. And, folks, despite Republican leadership rooting for recession, our economy continues to grow and add jobs as gas prices come down.

Latino workers saw largest increase in unemployment in October

The BLS has released the October Employment Report, which showed a 0.4 percent increase in the unemployment rate of Latino workers; increasing from 3.8 to 4.2 percent. 

However, this does not mean that this group has the highest overall rate. The rate from Black workers stands at 5.9, down from 6.4 percent in August. 

Across the board, the rate moved up as well from 3.5 to 3.7 percent. 

While the rate increased, the economy still added over 200,000 jobs --exceeding expectations and forecasts. 

How is the unemployment rate measured in the US?

There are multiple ways of measuring unemployment. It is fairly obvious that the data can be acquired by dividing the number of unemployed persons by the number of persons in the labor force (employed or unemployed) and multiplying that figure by 100. However, the variance comes into who is classed as unemployed or employed.

By the U-3 measure, used in the data acquired today, people are counted as unemployed if they do not have a full-time, part-time, or temporary job, is actively looking for a job. This means people who are without a job but not looking for work are ignored in the statistics.

This would explain statistical oddities such as 5.7 million people unemployed but more than 10 million job vacancies.

What have analysts said about the job market and interest rates

The labor market is basically OK, but it does seem to be slowing. The Fed is going to try to thread the needle where they slow down the labor market enough to put downward pressure on wages and inflation, without causing a recession.

US NEWS

What is the unemployment rate and how is it calculated?

The Department of Labor has revealed the number of people joining payrolls in the US has risen by 261,000, exceeding expectations around the 200,000 number. However, the unemployment rate increased by two percentage points to 3.7% which could be the first inklings of the effects from interest rate rises initiated by the Federal Reserve since the turn of the year. The employment figure is a slight decrease on the number from September.

Inflation news updates on Saturday

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.