US financial news summary | 31 August 2023
Headlines: Thursday 31 August 2023
- September SNAP benefits advanced in Floridadue to Hurricane Idalia
- US quarterly growth slower than expected in Q2
- Existing-home sales fell in July, prices rose for first time in five months
- White House launches SAVE, its new income-driven student loan repayment plan
- Minimum wage in Florida set to increase in September
- Minimum wage in Californiato go up in 2024
- New requirements to receive SNAP benefits in 2024 to take effect soon
- 20% of student loan borrowers to pay $500 monthly when payments resume, according to study
Interest rate hikes could be over, for now. There is evidence that the US labor market is weakening as interest rates take their toll on companies.
It remains to be seen what the data will show when the Bureau of Labor Statistics releases its employment situation document on 1 September. There is more data that will be released before the Fed makes its decision.
Data from jobs market points to slowdown
In August, private employers added 177,000 jobs, as reported by ADP, a human-resources company. This figure marked a decrease from the 371,000 jobs added in July and fell short of the 200,000 new jobs that economists had anticipated ADP would report for the month.
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The original plans for student debt cancellation may be dead but don’t rule it out of the future. At least, those are the sounds coming out of President Biden’s camp.
Using a process called negotiated rulemaking, the Education Department will bring together a wide range of voices to craft its new policy.
However, this will take a long time.
Medicaid is a health insurance program that is funded jointly by federal and state governments which strives to help low-income individuals have access to healthcare. It was established to provide medical coverage to children, parents, pregnant women, the elderly and the disabled who have limited income.
Although the federal government sets some basic ground rules, each state can choose whether to offer more healthcare services than those mandated.
Regardless of whether you are single or not, the amount you would need to earn to make ends meet in the United States can vary significantly based on various factors, including location, lifestyle, and individual preferences.
The cost of living also varies widely across different states and cities, with urban areas generally having higher living expenses compared to rural areas.
However, single people face certain challenges that are born of their civil status.
The Social Security Administration is ready to roll out September benefits.
Each month, the SSA sends benefits to retired workers and survivors; that is, the children, spouses, widows, widowers, or parents of a deceased beneficiary.
The SSA also sends disability benefits from the Supplemental Security Income program and Social Security Disability Insurance.
Some Social Security recipients can get up to $914 on Sept. 1. Find out if you’re one of these beneficiaries, as well as the full schedule for the month.
California case could deal blow to online usurers
A California judge is poised to decide if an online lender offering small loans at over 150% interest violates state law, which would deal a blow to finance companies that critics argue have skirted rate caps to profit from cash-strapped borrowers.
The California Department of Financial Protection and Innovation is seeking a ruling that would block Chicago-based Opportunity Financial from offering loans with an interest rate above California's maximum of 36%.
Legal experts say that if California wins, it could embolden other states to take action against lenders that make high-interest loans to low-income borrowers using what critics call "rent a bank" partnerships.
Critics say the partnerships allow some fintech lenders, which offer quick loans online, to get around the interest-rate caps most states impose on non-banks by partnering with banks in states like Utah, where there is no interest rate cap.
(REUTERS)
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After being extended multiple times, the student debt moratorium is coming to an end. Payments are resuming on 1 September and interest will be accrued once more.
If you have not enrolled in the SAVE plan then payments will resume as they were at the beginning of 2020. Contact your student loan servicer to find out what you could expect to have to pay. Checking your details are up to date is also important.
SNAP is one of the main nutritional benefits provided by the United States Department of Agriculture (USDA) in collaboration with state governments. This program provides financial assistance to low-income families for the purchase of certain foods.
The monthly allowance provided by the program depends on the size of the household, as well as its gross and net income and other requirements. The maximum amounts that beneficiaries can receive change each year, coming into effect on October 1.
Could the US be set to ease marijuana restrictions?
Shares in two of the biggest marijuana companies, Tilray Brands and Canopy Growth Corporation, increased by 10 per cent and 13 per cent respectively in early afternoon trading with the news that the US could ease restrictions on the herb.
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The Social Security Administration has finished mailing out August payments and is preparing for the September benefit mailing.
Every month, SSA sends benefits to retired workers, as well as survivor payments, which are sent to the children, spouses, widows, widowers, or parents of a deceased beneficiary.
SSA also sends disability benefits from the Supplemental Security Income program and Social Security Disability Insurance.
Learn which Social Security beneficiaries will receive payments of more than $1,800 up to $4,555 as a new month begins on Friday, September 1.
The minimum wage in the US is $7.50 per hour. Base salary has not increased in about 14 years, marking the longest period without an increase since the minimum salary rate was created in 1938.
Although the federal minimum wage has remained unchanged for more than 10 years, 30 states have set higher wages, including California.
Currently, the standard minimum wage in California is $15.50 per hour, one of the highest in the country, behind only the District of Columbia and Washington state.
The minimum wage in the Golden State is already one of the highest and it will continue to rise next year.
US quarterly growth slower than expected in Q2
On Wednesday, the Commerce Department revised its assessment, indicating that the US economy grew by 2.1 percent during the second quarter.
This figure represents a slight decrease from its initial projection of 2.4 percent and a modest improvement compared to the first quarter's 2 percent annualized growth rate.
It is likely that the rising interest rates played a role in the slowdown.
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Every year the Social Security Administration announces its COLA increase after the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September of the year is released. This year that will happen at 8:30 am ET on Thursday 12 October 2023.
The annual COLA is calculated measuring inflation across a wide variety of goods and services. When making the calculation, the Social Security Administration only uses the third quarter of each year to calculate the COLA for the following year. The agency rounds to the nearest tenth of a percent.
As a result of the Inflation Reduction Act passed by Congress last year, the Medicare program was given extra powers. At present, the country’s largest healthcare provider cannot negotiate the price of drugs it purchases, leaving prices at the whim of drug providers.
It will have this power from 2026, reducing costs for patients due to the immense power it will wield. The program aims to save $25 billion per year on drug prices by 2031.
Good morning and welcome to AS USA's live financial blog!
As a new month approaches, follow along as we bring you the latest news on SNAP benefits, Social Security updates and student loan repayment plans, as well as other financial news affecting US consumers as the government continues working to bring down inflation.