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Inflation Relief Checks: summary news 10 December

Update:
Financial news: Latest updates

Headlines: Saturday, 10 December 2022

- Higher than expected wholsale prices sent stock markets lower at close of week

- Biden administration has canceled $24 billion in student loan debt

- 9 million students loan borrowers sent erroneous debt forgiveness "approved" email

- Price of gasoline drops below last year's level now averaging $3.315 nationally

​​​​​​​- California could become the first state to enact a windfall profits taxon gas companies 

Supplemental Security Income recipients will be thefirst to see the COLA applied to their checks 

Medicare Open Enrollment ended, 7 December: What you need to know about Part B

- California continues distributing Middle-Class Tax Refund, with payments already benefiting 19 million residents 

- Federal Reserve Chair Jerome Powell suggests that elevated interest rates will remain

- Experts predicting a significant market adjustment in house prices​​​​​​​

- Some groups will receive two Social Security checks this month

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The US job market has been running hot over the past couple years with the total number of nonfarm jobs finally surpassing where the US was before the pandemic. There are more jobs available than there are people that are unemployed making it a great opportunity for workers to try to find a better job.

Many workers have already done this during what has been called the ‘Great Resignation’. But leaving your job in search of greener pastures voluntarily can come with risks. For one you may not be able to claim any unemployment benefits.​​​​​​​

The upside to inflation it's "great for real estate assets"

While many American household finances have been hurting due to rising prices it has been a boon for some assets. Related Company CEO Jeff Blau explains that inflation has made it "a great time" for those with real estate and fund assets.

House prices were up around 45% at their peak in June from before the pandemic. Those that rent out properties and have fixed-rate long-term debt are able see cash flow increase from higher rents. Meanwhile, as banks stop lending those with fund assets can offer bank-like loans but at higher rates.

How can I get my student loan completely forgiven?

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How can I get my student loan completely forgiven?

The White House announced a plan to wipe out up to $20,000 in student debt in August. However, that program has been put on ice after being challenged in the courts and it could be months until there is a definitive decision on the matter.

In the meantime, President Biden has extended the moratorium on repaying student loans until the end of August or the lawsuits are settled, whichever comes first. But even if White House lawyers should fail to convince the Supreme Court of the legality of Biden’s debt forgiveness, there exist other legitimate federal programs that can erase all of a borrower’s student loan debt. Here’s a look…

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Covid-19 vaccines, including the updated bi-variant booster, remain free across the US for all who want a shot.

As for flu shots, health insurance providers are legally obligated to cover a yearly flu shot for free, meaning that no co-payment can be required to receive it. However, for those without insurance, finding a free option can be very difficult.

Consumer sentiment rises, Wall Street frets about higher-than-expected wholesale prices

Wall Street broke a five day losing streak on Thursday. But a report the following day showing a higher-than-expected wholesale price increase dampened the mood sending stocks lower to finish the week in red. Markets will be watching what the consumer price inflation reading is on Tuesday next week to get a feel for how the Federal Reserve will act to control inflation. Policymakers will meet for two days next week to determine the next rate hike, expected to be 0.5%. 

Despite much talk of doom and gloom about a potential impending recession, consumer confidence increased in December according to a University of Michigan survey. The improvement is believed to be the result of falling prices, especially gas which is now below where it was a year ago.

Fewer homebuyers are paying more than the listed price

The US housing market has been cooling as buyers have been pushed out of the market due to a combination of prices soaring, around 45% since the onset of the pandemic, and mortgage rates spiking this year as the Federal Reserve jacked up interest rates. The drop in competition though has been good for those who have remained in the market. With fewer buyers bidding on homes the percentage of purchase prices above the final list price has shrunk to levels not seen since 2020.

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Two main factors have put the brakes on the US housing market over the past few months. The Federal Reserve’s aggressive rate hikes to fight inflation have helped to drive up mortgage interest rates on top of home prices increasing at a breakneck speed over the previous two years.

This could create a situation in 2023 where homebuyers will be better positioned when negotiating the purchase price when hunting for a home. Here’s a look at what the experts are saying to expect in the coming year.

Pause on student loan repayments more valuable than Biden debt forgiveness

Student loan repayments have been on pause since March 2020 when covid-19 plunged the economy into crisis. The moratorium has been extended eight times since then, the latest in November pushed back when borrowers will have to start making payments until then end of August or litigation over President Biden's student loan forgiveness plan has been settled, whichever comes first.

While Biden's plan would cancel up to $20,000 at most for some borrowers, the freeze on payments has been more beneficial for others. The reason? those with student loan debt that work in qualifying professions are earning credit toward their debt being discharged under the Public Service Loan Forgiveness program.

The PSLF program cancels all outstanding student debt for workers in the public sector after they make 120 monthly payments, or the equivalent of 10 years. Currently, those who are taking advantage of the program don't have to make payments but are receiving credit as though they were with the moratorium.

This has allowed them to save far more than they would get under the student loan debt forgiveness which is tied up in the courts. The Supreme Court has said that it will hear arguements on the legality of Biden't plan in February.

Job security adds to inflation concerns as workers negotiate their salary

As Mathew Boyle reports, the pay negotiation season is looking increasingly fraught this year as workers fret about 8% inflation — and their job security.

While the labor market remains tight, evidenced by last month’s better-than-expected increases in both jobs and wages, employers are gaining back some leverage just in time for the tough conversations between bosses and employees to begin.

This week Goldman Sachs Inc. said smaller bonuses and job cuts are coming while the running tally of tech layoffs hit 52,771 in November, the highest monthly total for the sector since Challenger, Gray & Christmas began keeping detailed industry data in 2000.

November nonfarm employment surpasses levels prior to pandemic

While not all industries have fully recovered from the economic crisis wrought by the covid-19 pandemic, the economy as a whole has surpassed the level of employment in February 2020.

Arts, entertainment, and recreation as well as accommodation and food services, which were two of the hardest hit industries during the recession, have yet to return to prepandemic levels. Jobs in transportation and warehousing have exceeded their levels prior to the economic crisis of 2020 reaching 112% of their levels prior.

Inflation report on wholesale price showed higher than expected increase

While inflation is cooling, it has been persistent throughout the past year. The latest report on wholesale prices, what sellers get for their products, surpassed forecasts. While the pace was the slowest for a 12-month period since May 2021 at 7.4% from a year ago, the increase of 0.3% for the month was a tenth of a percent higher than forecast. 

Lower enery costs were offset by a surge in food prices, rising 38% but this is thought to be an anomaly and not a trend. Economist and markets will now turn their attention to the Consumer Price Index due out next week on Tuesday when the Federal Reserve will begin a two-day meeting to decide on the course of future interest rate hikes.

It is expect that policymakers could announce a 0.5% rise in rates, which would be part of a much anticipated pivot in the central bank's strategy to bring rising prices under control. The chair Jerome Powell has cautioned that interest rates will have to stay elevated until inflation is brought to heel.

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President Biden announced his plans for widespread student loan forgiveness back in September, wiping up to $20,000 per person from the balances of millions of borrowers. But questions remain from those that it benefits.

Student loan debt can be a major financial barrier that burdens borrowers for decades, making it harder to purchase a home or start a business. Lenders will want to assess your existing financial obligations before offering any type of credit and hefty student loan repayments can make things tricky.

Student loans: the Biden administration gives $24 billion for forgiveness

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Student loans: the Biden administration gives $24 billion for forgiveness

360,000 student loan borrowers qualified for $24 billion in forgiveness through a policy fix known as the Limited Public Service Loan Forgiveness (PSLF) waiver. The waiver is a temporary measure to expand the eligibility of borrowers to get relief from their debts.

The PSLF program, signed into law in 2007 by then-President George W. Bush, aims to erase the federal student loan debt of those who have been engaged for 10 years in qualifying employment in public service or particular non-profit or government organizations.

Hello, and welcome to AS USA

Hello, and welcome to AS USA's blog on inflation relief and financial news. We’ll keep you up to date on measures that have been approved in states around the US to help residents cope with the high prices.

We'll also track what the government is doing to bring inflation to heel and how markets are reacting.

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