Relief checks news summary | 7 January 2023
Inflation Relief: Latest Updates
Headlines | Saturday, 7 January 2022
- The economy exceeded expectations by adding over 223,000 jobs in December, bringing the unemployment rate down to 3.5 percent
- The Federal Reserve had claimed that a strong job market was leading to inflation, will the central bank increase rates after the December report?
- Interest rate for a 30-year mortgage has increased slightly to 6.5 percent
- Supreme Court prepares to hear arguments on President Biden's student debt forgiveness plan in February.
Every resident in America can access Social Security support and more than 63 million people do so.
For those hoping to claim benefits once they have retired, it is mandatory that the worker has paid into the Social Security pot.
Depending on the number of years contributing and your annual income you will earn a certain number of work credits, which help to calculate your total benefit amount.
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Tesla slashes prices in China, other Asian markets as sales stumble
Tesla cut prices in China for the second time in less than three months on Friday, fuelling forecasts of a wider price war amid weaker demand in the world's largest autos market.
The U.S. automaker also cut prices on its best-selling Model Y and Model 3 electric vehicles in Japan, South Korea and Australia in what a person with direct knowledge of the plan said was part of an effort to help stoke demand for output from its Shanghai factory, its single largest production hub.
The shift is the first major move by Tesla since appointing its lead executive for China and Asia, Tom Zhu, to oversee global output and deliveries that have been at the heart of the company's recent challenges after falling short of its 2022 delivery target.
Tesla shares closed up 2.5% at $113.06 on Friday. However, the stock has lost 70% of its value in the last year.
What happened to interest rates in 2022?
At the last meeting of the Federal Reserve in December 2022, the key interest rate was increased by 0.5 percentage points to a target range of 4.25% to 4.50%, the highest since late 2007 during the banking crisis.
At the beginning of 2022 the interest rate was nearly 0% as the hangover of the covid-19 pandemic encouraged the Fed to decrease interest rates to historic lows.
IRS confirm mileage rate for business travel
The Internal Revenue Service have announced the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The standard mileage rate for business travel will be 65.5 cents per mile, up 3 cents from the midyear increase setting the rate for the second half of 2022.
Inflation remains a major problem for consumers and the Federal Reserve is considering further steps to address rampant price increases. / Jonathan Ernst / REUTERS
How high will the interest rates go up in 2023?
In the late 1970s, Congress passed a law that clarified the mission of the Federal Reserve to focus on four major goals: full employment, economic growth, price stability, and a healthy trade balance.
Now, the central bank thinks that some of these goals may be conflicting.
Last month, the unemployment rate hit 3.5 percent, reaching the historically low level seen in February 2020. This low rate has been supported with nominal increases in wages, which means that workers are being paid more, but that those increases do not reflect boosts in their disposable income, or what are called “real wages.”
Read our full coverage for more on the Fed's plan to raise rates and how that could impact employment levels and wages.
US saw real GDP growth in third quarter of 2022
The US saw a real increase in the gross domestic product of 3.2 percent after seeing 0.6 percent in the second quarter. The latest report shows that the economy is growing, which complicates the idea of a recession which consists of two-quarters of negative GDP growth.
With unemployment reaching record lows and interest rates rising, the economy is in uncharted territory. At the same time, the personal savings rate has dropped to 2.4 percent, but since the Bureau of Economic Analysis does not collate this data by income level, it is hard to see which groups are seeing drop-offs in savings. This rate has been falling steadily over the last year from around ten percent to just over two.
Consumer price data shows new pre-pandemic trends
The St. Louis Fed has reported that while spending on services remains under pre-pandemic spending levels, the consumption of durable goods is up by 33 percent.
However, as the economy takes its new shape, these trends may change as spending on services is trending upward while that for goods is going down. This may in part, be due to the fact that inflation is being seen in the service sector, with it exceeding "inflation for durables for the first time since the early days of the pandemic" in October. Higher prices means more spending which could mean that rather than more services being bought, more money is being spent in the sector generally.
White Houser responds to December jobs report
Today’s report is great news for our economy and more evidence that my economic plan is working. The unemployment rate is the lowest in 50 years. We have just finished the two strongest years of job growth in history. And we are seeing a transition to steady and stable growth that I have been talking about for months. We still have work to do to bring down inflation, and help American families feeling the cost-of-living squeeze. But we are moving in the right direction.
After a year of economic turbulence, the United States’ job market managed to close out 2022 on a positive note with strong figures. On Friday, the Department of Labor reported that 223,000 new jobs were added in December, exceeding experts’ predictions of 200,000.
This was positive reading for the White House, as was the news that the unemployment rate had fallen to 3.5%. This represents a long-awaited return to pre-pandemic levels.
Hiring undoubtedly cooled during 2022 from a high of 539,000 new jobs per month in the first quarter of the year. But this is to be expected as the US moves further away from the huge spike in unemployment at the start of the pandemic.
Read more in our full coverage about what the report says about the health of the economy.
Hello and welcome to AS USA's live blog on financial news, focusing on inflation and relief programs to help families keep up with increasing prices.
After a stronger-than-expected December jobs report, the Federal Reserve may continue to increase interest rates. Over the past few months, the Fed has said that a tight labor market, like the one we are currently experiencing, is to blame for inflationary pressure. However, it could be a few weeks before another increase is announced.
California is wrapping up the delivery of payments for the Middle-Class Tax Refund, and at this time, it does not appear that many states have plans to provide more relief.