Inflation Relief Checks: summary news 5 December
Inflation Relief: Latest Updates
Headlines: Monday 5, December 2022
- California passes windfall profits tax on oil and gas companies in the state
- US added 263,000 jobs in November, surpassing expectations
- Federal Reserve Chair Jerome Powell suggests that elevated interest rates will remain
- Controversial bill passed to prevent railroad workers' strike
- Biden's Student Loan Forgiveness program will be ruled on by Supreme Court
- US jobs market growth keeps unemployment at 3.7%
- Experts predicting a significant market adjustment in house prices
- More than 19M California residents have received Middle Class Tax Refunds
- Social Security beneficiaries will soon see an 8.7% COLA boost to their benefits payments
- Some groups will receive two Social Security checks this month
California to implement a windfall profits tax
Next year, drivers in California could see money returned to them after the state's legislature passed a bill to tax profits over and above those seen in 2021.
The Golden State has seen much higher gas prices, and Gov. Newsom announced earlier this year that to discourage price gouging, an additional tax could be levied against oil and gas companies.
After the will was passed, Gov. Newsom was quoted saying, “Big Oil has been lying and gouging Californians to line their own pockets long enough. I look forward to the work ahead with our partners in the Legislature to get this done.”
Find our more about the program.
US savings rate continues to fall
The Bureau of Labor Statistics released the October Personal Income report that showed a slight decrease in the amount households are saving, as a percent of their disposable income. This rate has reached some of the lowest levels since the 2008 Financial Crisis.
More money was spent in October, compared to September, and as the holidays approach, higher spending can be expected as many look to purchase gifts and make travel arrangmetns.
In October, the average monthly benefit for Social Security recipients was $1,676.53. Next year, when the Social Security Administration applies the 2023 Cost-of-living adjustment, that amount could grow by around $146 to $1,822 a month.
This increase is short of the $200 some retirees had hoped to see their benefits rise by, as many seniors on a fixed income struggle to keep up with inflation.
Read more on how much all beneficiaries of programs administered by the Social Secuirty Adminsttraion can expect their payments to increase by in our full coverage.
Many seniors are breathing a sigh of relief after the Center for Medicare and Medicaid (CMM) announced that the premium for Medicare Part B would be lowered from $170.10 paid by beneficiaries in 2022 to $164.90 in 2023.
For more details on what caused prices to come down, check out our full coverage.
What sectors added the most jobs in November?
Last week, the Bureau of Labor Statistics released the November Jobs Report, which showed that the economy added 263,000 jobs, with the overall unemployment rate remaining constant at 3.7 percent.
Like October, the number of jobs added was higher than many expected, considering how quickly the Federal Reserve has moved to increase interest rates. The US central bank expects unemployment to hit 3.8 percent by the end of December, and to reach that target, fewer jobs would need to be created this month.
What sectors added the most jobs?
1. Leisure and hospitality: +88,000 jobs, the majority of which were added in the food service sector (62,000).
2. Healthcare: +45,000
3. Government: +42,000.
Prices fall in one of the most competitive housing markets
House prices in California's Bay Area, one of the most expensive housing markets in the country, have fallen for six months in a row. This fall in average prices is tempting some prospective home buyers into taking advantage.
This report from CBS News outlines some of the reasons for the recent fall in property prices and gives advice to buyers. Beyond the fall in house prices, there is also the current mortgage rates to bare in mind. Unless you are able to buy outright, high interest rates will make your mortgage agreement more expensive.
Railroad worker in the United States have spent recent months looking to secure a better deal from operators as the country continues to grapple with high inflation. Price rises have hurt Americans for much of 2022 and workers in a number of vital industries are looking wage increases to ease the burden.
However, with a damaging strike seemingly on the cards, Congress voted to impose an agreement on the two parties to ensure that trains keep running during December. Here's what was agreed in the deal signed into law by President Biden...
Watch out for California inflation payment scams
There are still millions of eligible Californians who have not yet received their Middle Class Tax Refund from the state. Gov. Gavin Newsom passed legislation in the summer to provide a one-off inflation relief payment worth up to $1,050 per person, but fraudsters are looking to take advantage f the program.
Here, Los Angeles City Attorney Mike Freuer outlines one of the scams currently being used...
Social Security benefits are distributed every month to more than 65 million Americans.With such an extensive distribution effort needed, the Social Security Administration sends out its monthly checks in three waves of payment.
The Social Security payments are sent out on the second, third and fourth Wednesday of every month. Here’s when you can expect to receive your Social Security payment in December...
Watch out for California inflation relief payment in the mail
Close to 20 million Californians have now received their one-time payment as part of the state's Middle Class Tax Refund program. To help residents deal with rapid inflation California Gov. Gavin Newsom authorised a round of payments worth up to $1,050 per person.
Most eligible residents have now received their support but the physical checks are still being distributed in the mail. Keep an eye out for yours!
Social Security was first introduced in 1935 by President Roosevelt and it has become a key source of income for tens of millions of households every month.
The program is nearly 90 years old but is constantly evolving and there are a number of key changes coming in 2023. All recipients will enjoy an increase on their monthly payments in the New Year, but the work credit requirement has been upped so it will be slightly harder to qualify in the future.
Here’s three key changes to Social Security in 2023…
"We welcome the Supreme Court’s decision to hear the case on our student debt relief plan for middle and working class borrowers this February."
"President Biden will keep fighting against efforts to rob middle class families of the relief they need and deserve. As we previously announced, student loan payments will remain paused while the Supreme Court resolves the case."
What are average mortgage rates in the US?
Mortgage rates have fluctuated wildy in the past two years, starting off very low after the Federal Reserve has slashed interest rates in a bid to spark the languishing economy. But as the economy has picked up pace the Fed has upped the base interest rate on four separate occasions this year. From historic highs in early November typical mortgage rates have began to slip in the United States, but remain fairly high.
Calls for a commission into the future of Social Security
The future of Social Security is currently unclear and there is now an awareness that some changes may be needed to keep the programs viable. The US population, like many around the world, is skewing increasingly older, meaning that there are fewer workers to contribute taxes to pay retirement benefits.
Soon-to-be Republican Rep. Mike Lawler has called for a 'blue ribbon commission' into the future of the program, as well as Medicare, to better understand how to keep it viable.
What next for the US housing market?
For the past two years the US economy has been in a state of flux, largely brought about by the pandemic. But throughout that time house prices have risen at a fast pace, but there is now a feeling that the market is due a sizeable adjustment.
Here's what that could look like for home owners, and what it could mean for prospective buyers...
When will I receive my California inflation payment?
The state of California is sending out one-off payments worth up to $1,050 per person to residents, in a bid to offset the high rate of inflation. More than 19 million people have so far received their payment but there are still plenty more to be distributed.
If you've not yet received yours, or have some other issue with the payment, check out this handy guide from the OC Register...
What will happen to interest rates next?
The Federal Reserve has made tackling inflation the key target for much of 2022 and, despite making some progress in that endeavour, more work may be needed. The November jobs report showed that another 263,00 new jobs were added last month, suggesting that the economy is still growing fairly rapidly.
This could prompt the Fed to further increase interest rates in the US in a bid to discourage borrowing. The raising of interest rates is a pretty blunt tool when it comes to tackling inflation but for now the Fed may decide that it's a risk worth taking.
Mortgage rates fall for a third consecutive week
After topping 7% just last month, typical mortgage rates in the United States have fallen for three weeks in a row. However mortgage loan application volume fell by 0.8% over that time, suggesting that the lowered rates were not enough to tempt prospective buyers.
Mortgage rates, like interest rates, fell to historically low levels during the pandemic and many people snapped up a good deal on a mortgage. This push to buy saw house prices increase sharply and many buyers now feel priced out after months of sustained rises.
Tips to tackle inflation
Inflation has soared during 2022 and prices have risen on everything from gasoline to groceries. These increases are costing the average American household an additional $327 per month, according to a report from Moody’s Analytics.
But there are ways that you can manage your money this winter to help defeat inflation. This short video from CNBC explains how to make your money go further...
The housing market in the United States could see a substantial readjustment in the coming months as experts predict a fall in valuations across the country. The number of home sales has fallen for nine months straight and, with stock beginning to pile up in many markets, prices will have to come down.
“In one line: Collapse in prices is coming,” said Kieran Clancy, senior economist at Pantheon Macroeconomics.
We take a look at what that could mean...
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