US financial news | Summary news 17 September
Headlines: Sunday 17 September 2023
- Federal Reserve officials will meet next week to discuss a possible rate hike
- White House says it has been in touch with leadership from both the Big 3 and UAW.
- Various locations of major banks will close across the country next year
- United Auto Worker members went on strike at midnight after the 'Big 3' automakers do not meet worker demands
- Consumer Price Index shot up 0.6 percent in August:how will the Federal Reserve respond?
- Grocery prices are up three percent compared to last year
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146,000 auto workers will be on strike in the coming weeks. Three factories have been closed initially, while UAW president has said his union will expand the strike as much as they need until their demands are met.
They arenot the only big union on strike right now. The film actor and writers strike (SAG-AFTRA) has also been ongoing since the summer. Films have been postponed and series put on hold as virtually no work is taking place in Hollywood right now.
So why are big strikes taking place now?
Nominally, it is because the workers are unhappy. A combination of pay (autoworker CEO pay has increased 42% in 4 years compared to workers’ 6%) and conditions (how the arts moves forward in the AI age) are often the case.
This is all coming to a head amidst high inflation and high interest rates, shrinking people’s purchasing power and putting their homes under threat.
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Public in wide support for strikes
The public are in support of the action of both major strikes, the United Auto Workers (UAW) and the film actor and writers strike (SAG-AFTRA). Approval of labor unions is also at its highest point since 1965, according to polling.
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The United Auto Workers (UAW) union strike is set to halt production of some of the most popular cars sold in the US. While no new vehicles will be produced, the companies affected, Ford, GM, and Stellantis, turned up production in the run up to the strike.
At present, only three factories are affected by walkouts. These are the Ford assembly plant in Wayne, Michigan; the GM assembly plant in Wentzville, Missouri; and the Stellantis assembly complex in Toledo, Ohio.
The United States housing market slumped in the second half of 2022 with the value of homes falling by 4.9%, the fastest rate seen since the 2008 housing crisis. The market has slightly increased in value but repeated interest rate increases have been pushing down new sales.
Aside from the list price of the property, there are countless additional expenses to be considered when buying a home, such as the rate of property tax in the area that you are buying.
Oil prices set to hit 2023 record
Brent crude, the oil price benchmark, rose to a 10-month high last week of almost $94 a barrel, up from $72 a barrel at its lowest point in June – heading for its biggest quarterly increase since Russia’s invasion of Ukraine.
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Automotive workers in the US have begun huge strike action against the ‘Detroit Three,’ General Motors, Ford, and Stellantis (once known as Chrysler).
Talks to find an agreement between the United Automotive Workers (UAW) union and the companies ended on Thursday night without an agreement being found. 13,000 workers have begun the strike with the first plants affected being GM’s Wentzville assembly plant, Stellantis’ Toledo assembly complex, and the Ford Michigan assembly plant. In total, the UAW represents some 146,000 workers who are ready to drop their tools at any moment.
Why are California’s gas prices the highest in the US?
California is by far the most expensive state for gas. Since the beginning of the year the average price of a gallon of gas has been climbing steadily, now standing at $5.578 a gallon according to the AAA. This is nearly $2 higher than the national average of $3.871.
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The US Bureau of Labor Statistics (BLS) released August’s Consumer Price Index (CPI) last Wednesday, and it was slightly worse than expected. The CPI rose a seasonally adjusted 0.6% for the month, and was up 3.7% from a year ago. Economists had expected year-on-year inflation to be 3.6%.
What have the car companies been spending their money on?
For the first time in the history of the United Auto Workers, members are on strike against the Big 3 automotive companies: Ford, GM, and Stellantis.
The CEOs at the three companies have seen their pay increase forty percent over the last four years. The union argues that if executives have earned such high raises, then the workers who generate those profits deserve similar pay increases.
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The rate of tax levied on gasoline and diesel can vary hugely between states, meaning that the recent fuel price rises have hurt some more than others. California currently has the highest rate of state gas tax.
If you do some interstate driving it might be worth checking out the relative rates of tax. Drivers in some states pay very little compared to their neighbours.
Welcome to AS USA's live financial blog!
We'll be reporting on other financial news affecting US consumers as inflation ticks up, consumer spending slows, and the Federal Reserve prepares to decide if interest rates will be increased once again at their next meeting.