Relief checks news summary | 3 February 2023
Headlines | Friday, 3 February 2023
- January Jobs Report: 517,000 new jobs added last month, nearly three times the estimate
- Unemployment has fallen to 3.4%, the lowest rate in 54 years - What was the record low?
- Mortgage rates fall for fourth straight week, 30-yr fixed-rate 6.09%, nearly 1% below November peak
- Federal Reserve increases interest rates by 0.25 percent
- Haven't received your Middle-Class Tax Refund?Here is what you can do.
- Aid is now available to Californians who need assistance paying their gas bill
- Republicans circulate a proposal to replace federal income tax with a massive sales tax
- What will the standard deduction be for 2023?
- SNAP benefit checks expected to decrease next month
Read more from AS USA:
Wall Street frets about Fed reaction to January jobs report
Stocks rallied on Thursday as investors responded favorably to Federal Reserve Chair Jerome Powell’s avoidance of sounding hawkish on the central bank’s policy going forward. However, while all three major US indexes finished the week in positive territory, the January jobs report was an cold shower on Friday.
Policymakers are trying to bring inflation down with rate hikes, part of which means cooling the labor market. So the stronger than expected January jobs report was not good news. The forecast had been for an additional 185,000 new jobs, the Labor Department reported 517,000, nearly double the monthly average over the past three months.
As well unemployment fell, meaning that despite demand in the labor market workers aren’t returning to the labor market fast enough. The labor participation rate is another concern for the Fed which has yet to return to its pre-pandemic level. While the numbers are good for the economy the fear is that policymakers may turn more hawkish again on rates hikes.
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The rising price of eggs in the United States has push some to great lengths to acquire the food staple. Some Americans have tried buying them south of the border with the goal of lowering their grocery bills.
Treasury updates vehicle classification standard for $7,500 EV tax credit
As part of the Inflation Reduction Act, the rules for the $7,500 tax credit to encourage Americans to buy electric vehicles were modified. The new rules took effect 1 January 2023 and expanded the number of cars that would qualify for the clean vehicle tax credit.
However, there were interdepartmental discrepancies as to which cars qualified due to their classification based on the manufacturer’s suggested retail price (MSRP) limits. Some crossover vehicles were considered in some cases as a car, subject to the $55,000 limit, but in other cases an SUV, subject to the $80,000 limit.
The Treasury Department has announced that it has updated the vehicle classification standard to make it easier for consumers to know which vehicles qualify under the applicable MSRP cap. The consumer-facing EPA Fuel Economy Labeling standard will be used instead of the EPA CAFE standard.
Consumers who have purchased and placed in service vehicles since the beginning of the year that meet the new standards put in place and meet the other requirements can claim the credit.
Further guidance regarding critical minerals and battery components will be issued in March.
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The Inflation Reduction Act passed by Congress and signed into law by President Joe Biden in 2022 included a modification to the federal tax credit for Americans who purchase an electric vehicle. The new rules for the $7,500 IRS credit only apply to new vehicles purchased after 1 January 2023 but if you bought a car last year, your EV may qualify for the prior rules.
One major change to the Internal Revenue Code Section 30D, which the credit falls under, is that the electric vehicle must have its final assembly be in North America, this also applies to vehicles bought last year after 16 August. There are a few other requirements in order to qualify for the credit. We’ll walk you through what those are and how to apply for the credit.
As part of the Inflation Reduction Act, the IRS is offering a $7,500 credit when you file, but who is it for and how do you apply? Find out how to apply for the tax credit...
Several utility providers in California have warned that natural gas bills will be much higher than usual. Pacific Gas and Electric Company (PG&E) projects residential energy bills to be 32% higher from November to March, compared to the same period last year, according to a statement shared by the company.
Faced with high natural gas bills, the California Public Utilities Commission is considering doling out aid for Californians through so-called Climate Credits, which are part of efforts to fight climate change climate.
Tax season is in full swing in the United States.
From January 23 to April 18, the IRS will be receiving federal tax returns from individuals and businesses , corresponding to the fiscal year 2022.
According to official estimates from the government agency in charge of tax collection, it is expected that around 168 million Americans will file their respective tax returns this year.
Here’s the quickest way to get your tax refund for your 2022 income tax declaration, according to the IRS.
Having a good credit score comes with several benefits, such as lower interest rates on loans or other credit cards and it can even affect whether a landlord rejects you when you are looking to rent. That is why keeping it high is essential.
With the national economy experiencing a period of sustained growth there seems little chance that President Biden will approve another round of relief checks anytime soon. However a number of states are offering one-time payments to residents to help them with inflation, energy price increases and to stimulate the local economy.
Here's our complete rundown of those programs and who is eligible for financial support...
Where's my refund? Check online for free
Tax season can be a stressful time of year but, for the majority of filers, it does come with one significant bonus: tax refunds!
If you have submitted your tax return the IRS advises that it can take up to three weeks for your filing to be processed and your refund distributed. If you're wating around, you can check the status online with the Where's My Refund? tool.
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President Biden was understandably thrilled with the progress made in the jobs market during January, a month that marked two years since he entered the Oval Office and the midpoint in this term of his presidency. This morning he held a brief press conference from the White House to announce the results.
Here's what Biden had to say about the January jobs report...
Can the economy remain strong while inflation comes down?
The Federal Reserve is attempting to tread a very narrow path between inflation and recession at the moment, seeking to bring down price rises without strangling growth. The primary tool at its disposal is interest rate adjustments, which cool inflation by making borrowing more expensive. However doing so will discurage investment and could set back the US in its post-pandemic economic recovery.
The January jobs report has smashed expectations and pushed down the US' unemployment rate to 3.4%. This is the lowest level seen in more than five decades and President Biden was in celebratory mood when he addressed reporters at the White House this morning.
Biden heralds incredible jobs report
"We learned this morning that the economy has created 517,000 jobs just last month — more than half a million jobs in just the month of January.
And in addition, we also learned that we — there were half a million more jobs created last year than we thought, so the January report is updated. I mean, excuse me, the December report is updated.
Add that all up, it means we created 12 million — 12 million jobs since I took office. That means we have created more jobs in two years than any presidential term, than any time, in two years.That’s the strongest two years of job growth in history by a longshot."
US unempoyment rate falls to 3.4%
Today's release of the January Jobs Report made very pleasant reading for the White House after the United States economy added 517,000 new jobs last month. In addition to that striking headline figure, the unemployment rate in the US dropped to 3.4% - the lowest rate seen in 53 years.
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More from the jobs data reveal
Some of the most positive data comes from the leisure and hospitality sector.
Leisure and hospitality added 128,000 jobs in January compared with an average of 89,000 jobs per month in 2022. Over the month, food services and drinking places added 99,000 jobs, while employment continued to trend up in accommodation (+15,000). Employment in leisure and hospitality remains below its pre-pandemic February 2020 level by 495,000, or 2.9 percent.
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Republicans have said they do not want the debt ceiling cap lifted but are instead going to force the government to cut spending. Where these savings will be found is not to be social security it seems, if a new interview with McCarthy is to be believed.
“If you read our Commitment to America, all we talk about is strengthening Medicare and Social Security,” McCarthy told CBS’s Face the Nation.
What did Biden and McCarthy discuss this week?
On Wednesday President Biden met with House Speaker Rep. Kevin McCarthy, the two keys figures in the ongoing discussions to raise the debt ceiling. The United States has reached its statutory limit of federal debt and is now just months away from a catastrophic default.
Biden is determined to secure an increase without offering any concessions, but McCarthy wants some future funding cuts to be included in the package.
New US employment data released
Employers added a huge 517,000 jobs in January as hiring unexpectedly surged. Unemployment fell to its lowest level since 1969.
Economists surveyed by Bloomberg had forecast 185,000 job gains.
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Am I eligible for tax filing help from the IRS?
Lots of filers are already aware of the IRS' Free File online portal. However there is another form of support offered by the tax agency to make things easier for filers during, what can be, a stressful time of year.
If you make less than $60,000 you should be eligble for direct support from IRS-certified volunteers. Here's how you can claim the free assistance...
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The Environmental Protection Agency has studied some key indicators of the climate crisis, highlighting the threat posed to the planet by excessive consumption. Using this data a group of researchers from the World Inequality Laboratory, a project led by the economists Lucas Chancel and Tomas Piketty, have launched the proposal to create an international climate tax rate based on the highest fortunes of the planet.
We take a look at what this proposal would look like, and whether it would really help tackle climate change...
Europe follows suit with interest rate hike
The United States is far from alone in its struggles against high inflation. Major European nations are suffering price rises even more pronounced than are being seen in the US and the European Central Bank has taken action to curb the increases.
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The Social Security Administration (SSA) has begun sending out increased monthly payments for retired workers and Supplemental Security Income (SSI).
Thanks to the 8.7% cost-of-living adjustment (COLA) increase, retiree payments will increase to more than $140 per month on average. According to SSA, average payments in January 2023 are $1,827 dollars. On the other hand, Supplemental Security Income (SSI) recipient payments will increase to approximately $650.
Prospective homebuyers are getting some relief as mortgage rates and home prices drop
Mortgage rates have been declining since peaking in late October and early November. Freddie Mac reported a fourth straight week of rate drops with the 30-year fixed-rate down almost a full percent its high, as of Thursday 2 February averaging 6.09%. This, in addition to falling home prices, have brought relief to perspective homebuyers in the form of lower monthly payments.
The biggest relief is being felt by homebuyers in the San Francisco Bay area where median monthly housing payment is down more than twice the national average dropping 14.8%. Other tech hubs are also experiencing larger declines in monthly housing payments along with Pittsburgh and Detroit.
After a yearlong slump in the housing market there is now a noticeable uptick in demand from homebuyers being fueled by the lower cost of housing. While the median US home-sale price is still above where it was at the same time last year it has dropped from $400,000 to $388,000. Pending home sales in December saw their first monthly increase in 14 months rising 3% nationally, with level increasing the most in San Jose jumping 21%.
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We’re coming to the end of the California Middle Class Tax Refund. So far more than $9 billion has been issued to more than 7 million people since the middle of 2022. Very few are left to receive it.
For anyone who has not yet received their payment, the final payment will be sent by 22 February 2023. By this point, all eligible residents should have had the support as this payment should only be sent to people who changed their banking information since their 2020 tax return.
There is no way to track the refund.
Read our full coverage for information on how to contact the California Franchise Tax Board.
Hello and welcome to AS USA's live blog on financial relief and other economic news as the US recovers from pandemic related disruptions.
Earlier this week the Federal Reserve increased interest rates by 0.25 percent. The increase is smaller than previous changes in 2022 in light of the December inflation and employment reports that showed both a decrease in prices and unemployment.