Relief checks news summary | 17 february
US Finance News: Live Updates
Headlines: Friday, 17 February 2023
- Initial unemployment claims fell by 1,000 last week to 194,000
- Real wages fell by 0.2 percent in January for a year-over-year decrease of 1.8 percent
- Retail sales beat expectations, increasing 3% in January
- Wall Street leaders predict 'soft landing' of US economy: what does this mean for workers?
- Inflation data for January shows 6.4% price increase year-on-year
- IRS reports a ten percent decrease in the average refund size compared 2022
- Michigan to send $180 inflation relief checks: Who qualifies and when will they arrive?
2023 Tax Season
- Need help tracking your refund?Here is our short guide.
- Take advantage of the IRS' Free File online service
- Who to contact if your tax refund is stolen or never arrives
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The IRS allows for a qualifying relative as a tax dependent, but what exactly does that mean? The tax agency uses the term ‘qualifying relative’ for people who can be claimed as a tax dependent despite not being your spouse or child.
This can include boyfriends and girlfriends, but also nieces, nephews and siblings.There are four tests used to judge eligibility for qualifying relative tax dependent status...
Biden celebrates job growth numbers
"My economy is working. It’s in stark contrast to our Republican friends who are doubling down on the same failed politics of the past: top-down, trickle-down economics. There’s not much “trickle down,” as I said, to most kitchen tables in America. I’m looking forward to that debate, because the debate — we’re going to debate with the facts.
"Look, the last two years, we’ve created 12 million new jobs. That’s more jobs than any President has created in four years.
"The unemployment rate is 3.4 percent. That’s a 50-year low. My first two years in office, we created 800,000 new manufacturing jobs."
The Federal Reserve is tasked with providing stable conditions for the US economy and is utilising its power to adjust interest rates to cool inflation. But what does an ‘interest rate hike’ actually involve?
With financial experts predicting another three interest rate hikes in 2023, home-owners should anticipate further increases on their monthly mortgages repayments in the coming months. We take a look at what to expect...
Will interest rates affect the housing market?
Throughout 2022 the Federal Reserve was focused on bringing down the rate of inflation, which was running at dangerously high levels. Since a peak of 9.1% last summer inflation has began to slow, but it still remains uncomfortably high.
In a bid to address high prices the Fed has implemented a series of interest rate hikes to discourage borrowing. However that effort has had consequences for the housing market...
The US economy is in a state of flux. Like the pandemic itself, the economic recovery was felt differently by different sectors and the economy is experiencing growing pains as it returns to normal service. Some industries are thriving while others are floundering, a situation that has pushed the US into a rolling recession.
The economy may not fit the definition of a recession, but certain sectors are certainly in contraction. This rolling recession can be much harder to treat because different parts of the economy are growing at very different rates.
Packers Sanitation Service found employing children as young as thirteen
Packers Sanitation Service, a slaughterhouse cleaning company, has been fined by the Department of Labor $1.5 million after the agency identified a slew of labor violations within the firm.
Agents documented the employment of at least 102 children, some as young as thirteen, who were forced to work overnight shifts and handle hazardous materials. Some of the children working endured chemical burns as a result of poor conditions and lack of protection in the factories.
The violations occurred in at least eight states. Major meat producers, including Tyson Foods and Cargill, had contracted the company. This news comes after Iowa passed legislation to weaken child labor law protections, and other companies like Hyundai have been fined for illegally hiring children at production plants in Alabama.
American taxpayers who filed their 2022 tax returns as soon as the filing period opened at the end of Janauary will be receiving their refunds. However, many of them are smaller than the refunds seen during the 2021 filing season.
The average refund for the 2021 season was, at this stage, $2,201 while so far for the 2022 season it is $1,963, a 10.8% decrease. Nearly 8 million people have received a refund, more than twice the amount of mid-February at the same time last year. The total amount of money refunded at this point has increased by about two-thirds, from $9.5 billion last year to nearly $16 billion this year.
Federal Reserve Chairmen Jerome Powell has warned that the impacts of the central bank’s rate hikes have not begun to impact the US economy. Regardless, inflation is falling, leading financial markets to rally after a turbulent 2022. The renewed strength of the stock market has some leaders of the financial sector, like Goldman Sachs CEO David Solomon, predicting that the economy could stabilize without a disruptive recession.
Solomon sees the performance of stocks in recent weeks as evidence that “the market has a sense that we’re putting inflation in the rearview mirror.” There are still likely to be ‘twists and turns,’ but the executive believes the “chance of a softer landing feels better now than it felt six to nine months ago.” Read our full coverage to find out more on Wall Street's view and how it could impact workers.
The IRS offers a tool called “Where’s My Refund.” This allows taxpayers to check the status of their refund after providing their Social Security Number, the refund total, and their tax filing status. Read our full coverage for details on how to use the tracker.
Workaholism may not be a term everyone is aware of, though the feeling certainly will be. Coined as a term in 1971 by psychologist Wayne Oates as “the compulsion or the uncontrollable need to work incessantly”. Bascially, it means people who are working too much, maybe to the point of compulsion, while also not enjoying it.
Here are a few potential contributing factors...
The relationship between low unemployment and consumer resilience
The Federal Reserve has a reason why consumer demand has remained strong: low unemployment. Earlier this month, Federal Reserve Governor Christopher J. Waller described the impact of the BLS’s announcement that half a million jobs had been added to the economy in January.
“Such employment gains mean labor income will also be robust and buoy consumer spending, which could maintain upward pressure on inflation in the months ahead,” said Governor Waller.
Even when workers are seeing their disposable income fall, they, rather than the organizations that employ them, are to blame for inflation because “the very strong labor market makes it hard to find and retain workers.”
Economists talk a lot about the equilibrium of supply and demand, and it can be helpful to imagine labor as goods bought and sold like any other. When there is a shortage of a highly sought-after good or service, the price increases. Therefore, the low unemployment means workers have the power to negotiate their own worth at the expense of employers, leading to higher wages.
The renewed strength of the stock market has some leaders of the financial sector, like Goldman Sachs CEO David Solomon, predicting that the economy could stabilize without a disruptive recession.
Solomon sees the performance of stocks in recent weeks as evidence that “the market has a sense that we’re putting inflation in the rearview mirror.” There are still likely to be ‘twists and turns,’ but the executive believes the “chance of a softer landing feels better now than it felt six to nine months ago.”
US retail sales see positive growth
A Commerce Department report showed retail sales surged 3% in January as purchases of motor vehicles and other goods pushed the number well past the 1.8% estimate from economists polled by Reuters.
This follows the inflation data released on Tuesday which would suggest a few more interest rate hikes this year.
When a beneficiary receiving SSDI benefits reaches their full retirement age, the SSA automatically “convert[s] them to retirement benefits, and “the amount remains the same.” The average benefit for Social Security is $1,779.16, meaning that becoming disabled can leave individuals with lower incomes for the rest of their life.
The situation is slightly different for widows and widowers who receive a spouse’s survivor benefits. These individuals must contact the SSA when they reach their full retirement age so that any adjustments can be made to their benefit amount.
How many people are claiming unemployment benefits in the United States?
Initial unemployment claims fell by 1,000 last week to 194,000. This brings the 4-week moving average to 189,500.
The total number of beneficiaries was 1,696,000, down from 2,063,573 recorded during the same week in 2022. States with the highest percentage of workers receiving UI benefits for the week ending on 28 January were New Jersey (2.6), Rhode Island (2.5), California (2.3), Minnesota (2.3), Alaska (2.2), Massachusetts (2.2), Montana (2.1), Illinois (2.0), Puerto Rico (2.0), Connecticut (1.9), and New York (1.9).
BLS reports that real wages fell almost two percent in 2022
In nominal terms, wages are increasing (i.e., paychecks are showing a greater number than they did in 2021). However, in real terms, average incomes are falling.
The BLS has reported that in 2022, real income fell by 1.8 percent. Any nominal gains were absorbed by inflation, and disposable income fell. Last month saw a 0.2 percent decrease in real wages, showing that inflation continues to outpace any nominal increases.
This news comes as the Federal Reserve blames inflation on low unemployment and a tight labor market.
What is the average IRS tax refund this year?
Tax season is not a fun time of year for filers, but it does bring the financial bonus of a tax refund for most taxpayers. In recent years the average refund has been bolstered by federal support programs, such as the stimulus checks and boosted Child Tax Credit.
This has been born out in the data so far this year. The IRS has said that the average refund amount so far is $1,963, a 10.8% decrease from the figure of of $2,201 recorded last year.
It's no secret that the United States has experienced a period of sustained high inflation over the past 12 months. Prices are rising well ahead of the Federal Reserve's 2% target, but changes do appear to be moving in the right direction.
“Inflation data received over the past three months show a welcome reduction in the monthly pace of increases,” Fed Chairman Jerome Powell said earlier this month. “And while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.”
We take a look at what's causing high inflation...
Federal Reserve likely to introduce further interest rate hikes
The Federal Reserves, the United States' central bank, may decide to enact further interest rate hikes in a bid to tackle inflation. Increasing interest rates should cool the economy and slow the rate of price increases. However the rate increases have had significant effects for borrowers and has made mortage repayments more expensive.
Good morning and welcome to AS USA!
Hello and welcome to AS USA, your home for financial news and information this filing season. We have the latest advice and guidance from the IRS to help you submit taxes, along with information on the January inflation report and more.