Relief checks summary news: 23 february
US Finance: Latest Updates
Headlines: Thursday, 23 February 2023
- Initial unemployment claims fell to 192,000 last week, down 3,000 from the week prior
- White House announces plan to reduce mortgage payments by $800 a year for over 850,000 homeowners and buyers.
- Meta announces another wave of layoffs, backtracking on their previous commitment
- What you need to know about SALT this tax season
- Morgan Stanley predicts 26% drop in S&P 500 in coming months
- Stocks take a hit on poor retail forecasts and Fed rate hike expectations for 2023
- Department of Labor announces penalties for 13 companies found violating child labor laws
- Inflation data for January shows 6.4% price increase year-on-year
- Michigan to send $180 inflation relief checks: Who qualifies and when will they arrive?
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:
The latest statistics from the Labor Department found that hiring has slowed but still exceeded expert’s predictions last month. / Stefani Reynolds / AFP
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.
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.
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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.
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.
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...
What next for the housing market?
The housing market has undergone a tumultuous couple of years after the pandemic turned the United States' economy on its head. During the first year of the pandemic house prices soared with a new urge to buy and dwindling stock levels. However after prices hit an all-time high there has been a major readjustment and the number of sales slumped in January.
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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 S&P 500 could lose over a quarter of its value in coming months
A new report by Morgan Stanley paints a bad picture for the S&P 500 in the coming months. The stock market index has rallied since the start of the year after a punishing 2022. However, they are now at their most expensive level since 2007 by the measure of equity risk premium, pushing them into what the report’s lead strategist Michael Wilson call the “death zone”.
His team is forecasting that the broad-based index could lose up to 26% in the first half of 2023 as any Federal Reserve “pivot” on rate hikes looks unlikely. The recovery of stock valuations had been driven by the idea that with inflation easing the Fed would slow or end its rate hikes. However, with monetary tightening expected to continue, the risk-reward for equities is now “very poor”.
President Biden wishes Secretary of Labor Marty Walsh goodbye
Through Marty’s leadership, this administration has helped unions secure a historic pay raise for rail workers, continued the fight for paid sick days for all American workers, strengthened workplace protections, and ushered in a historic surge in union organizing. He knows that unions make us all stronger, no matter what we do or where we come from.
My dad used to say that a job is about a lot more than a paycheck, it’s about dignity and it’s about respect. Few people understand that more than Marty. I thank Marty for his work, which has made life better for millions of working Americans, and will serve as a model for all future Labor Secretaries who truly value American working people.
Mark Zuckerberg and Meta Platform Inc. are planning another job-cutting spree. The company’s CEO announced that the tech giant wants to cut unnecessary and wasteful projects. It is also looking to fire more people even after it laid off 13% of its workforce this past November.
Wall Street rallied behind Meta when they announced their debt restructuring of $4.5 billion back in November. The stock had fallen 62% last quarter, and it closed with a surge of 27% this quarter. However, investors are not so sure about the viability of Meta and are not entirely sold on this rise. The stock perhaps had an increase because of the cutbacks but not because of the service provided.
Read more on the planned job cuts in our full coverage.
Severance agreements with gag clauses deemed illegal by federal labor board
The Democratic majority on the National Labor Relations Board overturned a pair of Trump-era rulings allowing companies “carte blanche” when offering employees severance packages that include gag clauses. The 3-1 decision ruled that that laid-off workers cannot be required to sign agreements that contain confidentiality clauses nor other provisions in exchange for receiving severance which could hinder them from exercising their rights under federal labor law.
The case involves McLaren Macomb, a Michigan hospital operator, which upon closing a surgery center during the pandemic furloughed 11 employees. They were given severance agreements with confidentiality and non-disparagement provisions that were deemed illegal because they could discourage the laid-off workers from filing complaints with the NLRB or publicizing labor disputes.
Fed minutes on slower interest rate hike policy, members want to assess progress
Investors were waiting for the Federal Reserve minutes from their meeting earlier this month to better understand policymakers feelings about interest rate hikes moving forward. 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.
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Purchasing a home and earning a college degree are some of the last proven ways to build generational wealth in the United States. However, as detailed by the White House, the “nationwide shortfall in the supply of affordable homes” has effectively priced first-time homebuyers out of the housing market in communities across the country.
Today, the White House announced a plan to bring down prices and increase access for “first-generation homebuyers and first-time homebuyers of color.”
Biden-Harris administration announces plan to reduce mortgages by $800 on average
"Today, the Biden-Harris Administration announced an action that will save homebuyers and homeowners with new FHA-insured mortgages an average of $800 per year, lowering housing costs for an estimated 850,000 homebuyers and homeowners in 2023.
"Vice President Harris and Department of Housing and Urban Development (HUD) Secretary Fudge will travel to Bowie, Maryland, today to announce that HUD, through the Federal Housing Administration (FHA), will reduce its annual mortgage insurance premium by 0.30 percentage points, from 0.85% to 0.55% for most new borrowers...
"Today’s announcement is an important step in making homeownership more attainable. FHA-insured mortgages, which accounted for 7.5% of home sales in the third quarter of 2022, are targeted at homebuyers who otherwise may not be able to achieve homeownership. This cost-lowering measure will make buying a home more attainable and affordable for more low- and middle-income borrowers."
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.
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.