Relief checks: summary news 24 February
US Finance News: Latest Updates
Headlines: Friday, 24 February 2023
- Wall Street sinks, set to end week in negative territory, fearing interest rate hikes
- Unemploymenet rate for disabled workers fell to 7.2 percent in 2022
- Initial unemployment claims fell to 192,000 last week, down 3,000 from the week prior
- Differences between a stimulus checkand a disaster relief check
- Federal government pushes to enroll seniors in SNAP benefits, formally known as food stamps, as inflation cut into retirement benefits
A few cities are piloting universal basic income to evaluate the policy and its various structures better.
IRS outlines tax refund filing situation
Austin, Texas leads US capitals in terms of falling home prices: where else are prices falling?
2023 Tax Season
- Which states are still sending relief checks in 2023?
- Did you receive a state stimulus check? No need to report the payment as income to the IRS.
Read more from AS USA:
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/LKUCYQYZUJWKCH4VXAEODE2F5A.jpg)
A bill to provide a stimulus check worth up to $500 for those who filed their 2021 and 2022 tax return has passed the Georgia House of Representatives. This renewal of a tax credit enacted last year kicked in when both 2020 and 2021 tax returns were submitted.
Now, it is up to the Georgia Senate to determine whether millions will see between $250 and $500 tacked onto their tax refund. The bill passed in the House by a huge margin, 170 to 2, which indicates a high chance of passing in the upper chamber.
The extension of this credit was a key pillar of Republican Governor Brain Kemp’s re-election campaign that he won in November. With Georgia voters delivering him the victory, Gov. Kemp is working to make good on these commitments.
Read more on who qualifies and the amounts would be distributed in our full coverage.
The housing market is one of the sectors most impacted by the Federal Reserve’s decision to rapidly increase interest rates.
The average rate applied to a thirty-year mortgage has risen from 3.92 percent a year ago to 6.32 today. Before these rate hikes took effect, the housing market had been on fire, with prices rising rapidly in cities and towns nationwide. As the price of a mortgage has risen over the last year, demand has begun to fall as low-and-middle-income buyers, and first-time home buyers are priced out of the market.
Read more on the housing markets seeing a decrease in prices in our full coverage.
President Biden comments on the January PCE report
Today’s report shows we have made progress on inflation, but we have more work to do. Annual inflation in January is down from the summer, while the unemployment rate has remained at or near a 50-year low and take-home pay has gone up. We’ve also continued to make progress since the data in this report, with gas prices down again – now more than $1.60 since last summer’s peak after Putin’s unconscionable invasion. As I’ve long said, there may be setbacks along the way, but we face global economic challenges from a position of strength. And I will not allow my Republican friends in Congress to undermine that strength.
Home sales jumped in January, reaching ten month high
As home prices fell in January, sales increased to a ten-month high.
From December 2022 to January 2023, housing sales increased by 7.2 percent; however, the year-over-year rate fell by 19.4 percent.
As interest rates are increased by the Federal Reserve, the data shows that the rate of homebuying is slowing down. Federal interest rates impact those offered for mortages and as they move up, some buyers are priced out of the market, leading demand to fall which is then followed by a decrease in prices.
Recession not in sight, but inflation picks up sparks fear of interest rate hikes
Good news, bad news. The US economy continues to show robust strength with consumer spending increasing by the most in two years. Additionally, personal income rose 0.6% aided by a strong surge in wages and salaries of 0.9%. January saw solid job growth and the US currently has its lowest unemployment rate in more than 53 years.
However, inflation accelerated in January to 5.4% up from 5.3% the month before according to the latest Personal Consumption Expenditures (PCE) price index report from the Commerce Department’s Bureau of Economic Analysis. The PCE is the Federal Reserve’s preferred inflation gauge for determining interest rate policy. The higher-than-expected price increase sent stocks on Wall Street lower on Friday, expected to close the week with deep losses as traders worry the Fed will continue rate increases into the summer.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/VX7LA3SEKJIG7ANO5X6H35M7VE.jpg)
Although the tax authority has warned that they expect refunds to be smaller this year, there are opportunities for some taxpayers to receive bumper refunds if they qualify for the Earned Income Tax Credit (EITC) and the California Earned Income Tax Credit (CalEITC).
There are also other programs that can be utilised to increase your tax refund payment...
The housing market is one of the sectors most impacted by the Federal Reserve’s decision to rapidly increase interest rates.
The average rate applied to a thirty-year mortgage has risen from 3.92 percent a year ago to 6.32 today. Before these rate hikes took effect, the housing market had been on fire, with prices rising rapidly in cities and towns nationwide. As the price of a mortgage has risen over the last year, demand has begun to fall as low-and-middle-income buyers, and first-time home buyers are priced out of the market.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/XZR2SOQPQNGBXMBALCKCSQGRUE.jpg)
Tax filers will be eager to know if and when they will be receiving a tax refund. Filing a tax return as soon as possible is the best way to make sure your return is processed promptly; the IRS will be sifting through tens of millions of tax returns on a first-come-first-served basis.
Typically the IRS is able to distribute a tax refund within 21 days so long as the return is filed electronically. Those who file with paper may have to wait up to six months to receive their refund.
Read our full coverage for details on when you can expect your refund and how to track it.
More interest rate hikes expected after Fed minutes
Minutes from the Federal Reserve's January meeting were made public this week and it looks like more interest rate hikes are in store for the first half of 2023. Although significant progress has been made to bring down inflation, with price rises currently running at an annualised rate of around 6% the economy is still far above the Fed's 2% target.
Federal and state officials implemented a number of financial relief programs designed to support Americans through a tumultuous few years for the US economy. The three rounds of federal stimulus checks were the most well-known of these efforts but there were countless other examples throughout the pandemic emergency declaration.
Under the emergency declaration, most recipients will not be taxed on the payments that they received. But there are still some major difference between two popular forms of tax-exempt support: disaster distribution and stimulus checks.
We take a look...
Universal basic income (UBI), sometimes known as guaranteed income, would provide a regular payment to citizens whether they were in work or not.
The idea behind it is that it would decrease poverty and allow people to have a level of money without any dictation from salary or benefits. Outside of raw economics it would give people the chance to work less and live more fulfilling lives in being able to choose jobs they want to do rather than what they have to do to survive.
Here are the US cities invovled in UBI programmes.
According to the National Council On Aging (NCOA) there were more than 5 million older adults did not have access to healthy food in 2019. More than 10% of over 65s live in poverty.
Supplemental Nutrition Assistance Program (SNAP) is a lifeline for these people. Benefits are transferred to Electronic Benefits Transfer (EBT) cards. The average SNAP benefit for a one-person senior household is $104 per month.
”We have the resources to ensure that all people can live without the threat of deprivation,” said NCOA’s Ramsey Alwin. “But we need the political will to use them.”
Fed minutes show likelihood of increased hikes
Since last March, rates have gone from near zero to the 4.50%-4.75% range over eight meetings, the fastest increase since the 1980s.
While it should come as no surprise, the majority voted to slow the pace of rate hikes once again this month with a 0.25% increase. However, a “few” wanted another half percentage point boost to get interest rates to a more restrictive level, where policymakers want to be, faster. That means that more than the two members present known to be calling for such a measure were in favor, but how many is unknown.
In the end though, many felt that the slower pace would help assess the economy’s progress in response to the interest rate hikes already in place as well as their effect on inflation as they try to drive it down to their target of 2%. The decision was cast as a “risk management measure” as policymakers try to thread the needle of taming rising prices without throwing the economy into a recession.
However, the increases look set to continue at a faster rate.
Social Security payments are calculated based on each claimant's individual personal and financial situation. The main factors taken into consideration for retirees are the age of retirement and the 35 years in which the worker earned the most, as an annual average.
However there is also a maximum retirement benefit amount, which no one can exceed. That top figure was upped for 2023, meaning that some people are now enjoying a larger payment...
Interest rates will rise, Fed notes suggest
The Federal Reserve is tasked with balancing the twin terrors of recession and inflation, and is seeking to use interest rate hikes to tread the narrow path between the two. During 2022 the Fed enacted a number of interest rate hikes that pushed up the base rate to the highest level seen since 2007. Based on the recently-released notes from the central bank it looks like more rises are set to come in the first half of 2023.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/XPJMQ7WVJ5K5NPYMSR2NF4GT4Q.jpg)
Several states have continued to send direct payments to residents to combat inflation. While some of these programs have ended, there are a few states that will allow checks to be claimed, or that plan to send checks in 2023... Let's check them out.
Gasoline prices remain well above pre-pandemic level
While gasoline prices have come down since their high a little under a year ago, they are still well above those seen before the pandemic. After the Russian invasion of Ukraine, gas prices rose rapidly and have taken time to come down.
On February 20, the St. Louis Fed reported that the average price for a gallon of gasoline stood at $3.38 and a gallon of diesel stood just $1 higher.
Initial unemployment claims decrease for the second consecutive week
Last week, 192,000 initial unemployment claims were made to the Department of Labor, a decrease of 3,000 from the week prior.
States where initial claims increased included, Ohio (+1,855), Michigan (+1,350), Massachusetts (+743), Texas (+702), and Minnesota (+683). At the end of the spectrum, California (-4,297), Pennsylvania (-2,594), Illinois (-1,956), Kansas (-985), and Iowa (-723) led the way in decreasing initial claims.
For the week ending on 11 February, there were 1,654,000. This figure also fell, this time by 37,000, from the prior week.
Read the full report from the Department of Labor.
AS USA's live blog covering financial news and economic relief
This week the Federal Reserve is expected to announce further increases, a move that will likely bring down financial markets later in the week. These increases will come after the news that the economy added over half a million jobs in January, coupled with an increase in consumer prices of 0.5 percent. These datapoints are sure to influence the decision of the Fed when determining future rate increases.