US financial news | Summary news 19 September
US financial news: live updates
Headlines: Tuesday 19 September 2023
- Gas prices surge in California, up 30 cents per gallon in one week
- What you need to know about the UAW strike
- Federal Reserve officials will meet next week to discuss a possible rate hike
- Various locations of major banks will close across the country next year
- Consumer Price Index shot up 0.6 percent in August:how will the Federal Reserve respond?
- Experts forecastwhere is inflation expected to go by the end of 2023
- Grocery prices are up three percent compared to last year
Read more from AS USA:
Social Security benefits are adjusted each year to prevent Americans from being swamped by inflation. This cost of living adjustment (COLA) has been especially important in the last two years, which saw adjustment increases of 5.9% and 8.7% in 2022 and 2023, respectively.
Read our full coverage for the latest forecasts on the 2024 COLA.
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Neobanks are a new trend in the financial sector and describe institutions that offer some services of a traditional bank but through a fully digital platform. Most neobanks, like Chime and Revolut, that operate in the US, are FDIC-insured, meaning that depositors can receive up to $250,000 if the bank fails. This makes the banks as safe as traditional options, but with limited services and no physical branches, neobanks may not meet the financial needs of all those who require banking services.
Read more in our full coverage on the growing trend of neobanks.
Senator McConnell says government shutdown would be a loser for the GOP
We’re waiting to see what the House is going to do on a continuing resolution. I think all of you know I’m not a fan of government shutdowns, I’ve seen a few of them over the years, they never have produced a policy change and they’ve always been a loser for Republicans, politically.
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In addition to retired workers, the Social Security Administration (SSA) issues millions of payments to people with disabilities. They fall into the category of recipients of Supplemental Security Income (SSI).
The size of the checks varies depending on each person’s situation. However, year after year, the SSA makes an adjustment to prevent beneficiaries from losing out because of inflation, the cost of living adjustment (COLA).
The October SSI check of $914 will be issued automatically on Friday, 29 September.
Negative amortization is a term in finance used to describe when the initial balance of a loan increases over time rather than decreasing as it normally would with standard loan amortization.
It occurs when the borrower’s payments are insufficient to cover the interest accruing on the loan, resulting in unpaid interest being added to the loan’s principal balance. This can lead to a growing debt instead of a decreasing one despite payments being made.
Poverty rose as fuel prices skyrocketed
While no dips in fuel consumption were seen, the impact of inflation, in part driven by higher fuel costs, has had highly detrimental effects on millions of households. Last year, child poverty rose from a historic low of five percent to over twelve, as inflation cut into purchasing power.
In other words, although households were spending more, they were getting less, and higher prices pushed them into poverty or, in some cases, back into poverty.
Seeing fees and penalties applied to your bank account, credit card bill, or student loan payment? They could be junk fees.
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With certain Social Security recipients due to be get their monthly check this week, we offer the lowdown on the SSA’s payment schedule.
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Next year, many Social Security recipients in the United States can expect to receive a boost to their monthly benefits as a result of the annual cost-of-living adjustment (COLA). The Senior Citizens League, which is one of the country’s largest non-partisan seniors’ groups, recently made their latest prediction for how big the increase will be when announced next month.
Some states continue to send stimulus checks or tax refunds to their residents to give their residents a financial lift.
Online banking is taking hold of the nation and this is forcing brick-and-mortar branches to shut across various states.
Some key areas of the economy are showing signs which bode well for inflation to continue cooling in the United States through the end of the year.
California is renowned for its high gasoline costs which are far higher than the US average. In the past week the average price per gallon of regular has spiked nearly 30 cents. County by county the average price ranges from just over $5.27 to almost $7.00.
While most drivers are paying much less than they were a year ago when the average national price broke over the five-dollar mark, geopolitical action means prices are on their way up again. Prices have been rising since the summer and once again California is the most expensive state for gas in the country.
According to AAA, a gallon of regular gasoline has hit $5.76 on average in California, while drivers in one county in California has the most expensive in the nation, with the price over $6.99 in Alpine County.
In which US state is gas most expensive and where is it the cheapest?
Prices at the pump are on the rise once again, jumping eight percent in two months. According to the Bureau of Labor Statistics (BLS), increases in gas prices accounted for half of the 0.6 percent increase in the Consumer Price Index seen in August. Although drivers of gasoline-powered cars are likely to feel an additional pinch, consumers could see prices rise across the market as transportation costs for businesses balloon.
Read more in our full coverage on the relationship between gas prices and consumer spending.
Many questions are circulating around the United Auto Worker’s ‘Stand Up Strike’ that began last week. Union members of the ‘Big 3′ automotive companies, Ford, GM, and Stelantis, are currently working without a contract as negotiations continue between union leaders and corporate executives.
The UAW faced a series of public relations disasters in 2020 after the Justice Department charged various leaders and automotive bosses with corruption-related charges, including tax evasion and racketeering. The federal agency required the UAW to hold a referendum asking members if they wanted to adopt new voting rules, allowing them to elect their leaders directly. The measure was approved, and elections were held in March 2023. Shawn Fain was elected UAW President against incumbent Ray Curry, and with Fain running on a much more militant platform, the win was seen by many members as a pivotal moment in the union’s history.
Read more on the strike in our full coverage.
In the US, a retiree’s average social security check in August was $1,840.27. For some retirees, these incomes are supplemented by pensions (56 percent) and private retirement accounts like Roth IRAs or a 401(k) (42 percent). Even with public and private options, poverty impacts around one in every ten seniors, highlighting the challenges many older generations face when they exit the workforce.
Even with public and private options, poverty impacts around one in every five seniors, underscoring the challenges many older generations face when they exit the workforce. The average for all OECD countries is 13.1 percent.
To compare the retirement security of workers in the US, we looked at four different variables: the poverty rate for seniors, the average age of retirement, the average number of years spent in retirement, the average, and the retirement savings programs (public and private) available to the average worker.
Read our full coverage for more details.
Even with public and private options, poverty impacts around one in every ten seniors, highlighting the challenges many older generations face when they exit the workforce.
Even with public and private options, poverty impacts around one in every five seniors, underscoring the challenges many older generations face when they exit the workforce. The average for all OECD countries is 13.1 percent.
Health costs generally outpace other sectors of the US economy but the last two years have been an exception. However, because medical inflation typically lags behind what is experienced in the rest of the economy, broader inflation, which peaked in mid-2022, is expected to flow through to the health system.
This will put upward pressure on premiums for next year. The Peterson-KFF Health System Tracker looking at data from 320 insurers participating in the ACA marketplace found a median proposed premium increase of 6 percent. A more detailed analysis showed a median 9 percent rise in proposed premiums.
Here's how inflation is trickling into the cost of health insurance.
Welcome to AS USA's live financial blog!
We'll be reporting on all the 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.