US business news live updates: Social Security benefits, SNAP payments, possible government shutdown...
US Finance News: Latest Updates
Headlines: Thursday 14 September 2023
- Various locations of major banks will close across the country next year
- United Auto Worker members could go on strike at midnight if 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?
- Another government shutdown looms large over Washington
- Grocery prices are up three percent compared to last year
- Be aware of possible scams as the student loan moratoriumcomes to an end
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Every year, the Social Security Administration (SSA) increases monthly payments for the various programs it oversees, including Social Security and Supplemental Security Income. The percentage of the increase depends on the Cost of Living Adjustment (COLA), which is calculated using consumer price data provided by the Bureau of Labor Statistics.
Read more in our full coverage for details on the programs that see an increase in value thanks to the COLA.
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. The Affordable Care Act allocated funding for states to expand coverage to all adults with income no more than 133% of the Federal Poverty Level (FPL). It also allows 5% of income to be ignored so the threshold is 138% of FPL in reality.
All states, the District of Colombia, and US territories offer Medicaid, although the extent of that participation varies. States can set their own income thresholds higher, or in the case of the non-expansion states lower, than the federal level, meaning that there is no uniform income threshold for Medicaid eligibility.
Read our full coverage for the details on Medicaid income caps from state to state.
Unprecedented inflation driven by corporate greed, geopolitical conflicts, and supply chain challenges left over from COVID shutdowns have forced families to confront higher prices across commodity markets, namely food, energy, and housing. From July to August, grocery prices rose 0.2 percent on average and are up three percent compared to this time last year.
Read our full coverage for details on which food products saw the largest price increases in August.
The average full-coverage car insurance policy had risen to $2,064 per year at the end of the first half of 2023. That breaks down to $172 per month, according to Insurify data, far surpassing predictions made last year.
However, the rise in car insurance hasn’t been uniform from state to state.
Flying anywhere out of the US is expensive. The country is far from many tourist destinations, making flights long and certainly not cheap. This is not helped by large flight prices over summer when most people want to get away.
There are certainly better times to fly and one is coming up now; fall. Indeed, research from Hopper, a travel research company, says prices this fall are set to be 29% lower than fares this summer.
The tech industry saw major growth during the pandemic as covid-19 shuttered offices, transforming the way many workers performed their jobs. Remote work, increased shopping online and the rise of cryptocurrencies all aided the expansion of tech companies and their market valuations.
This led to a splurge of hiring for many companies but the economic winds began to change as central banks began to aggressively raise rates to put the brakes on rising prices. With interest rate rises strangling investment, hundreds of thousands being laid off and with more expected to come.
Google is the latest company to fire staff
“It’s not something that was an easy decision to make, and it definitely isn’t a conversation any of us wanted to have again this year,” Brian Ong, Google’s recruiting vice president said.
“Given the base of hiring that we’ve received the next several quarters, it’s the right thing to do overall.”
The US national debt represents the cumulative amount of money the federal government has borrowed over time to cover budget deficits (when expenditures exceed revenues). It includes various types of debt instruments, such as Treasury bills, notes, and bonds, held by both domestic and foreign investors, as well as government agencies.
A critical factor is the debt-to-GDP ratio, which measures the national debt relative to the size of the economy.
Many people rely on Social Security benefits to finance their lifestyle after retirement. So, they make regular contributions while they are still working, expecting or hoping to receive checks that will be able to cover their monthly expenses when they finally decide to retire.
Although Social Security payments are taxable, the District of Columbia and 39 states do not tax these benefits. Find out in which areas your retirement income will have no tax deductions.
Real wages fell half a percent in August
August saw one of the most significant decreases in real wages this year, falling 0.5 percent. Compared to August 2022, real wages are up by 0.5 percent, but since January, no increases have been seen.
Real wages account for how changes in the Consumer Price Index impact a worker's purchasing power. The CPI tracked a 0.6 percent increase in average prices last month, meaning that while workers may have seen nominal increases in their paychecks, they were not enough to overcome the impact of inflation. This is especially true when we consider the sectors that drove inflation in August: gasoline, shelter, and food. These are essentials for many households making upward changes in their prices more noticeable.
Many Social Security beneficiaries have been waiting for the announcement regarding the cost-of-living adjustment that will be determined this year, as this will have an effect on how much the corresponding increase will be for Social Security payments.
The COLA calculation takes into account the CPI-W data from the third quarter of the previous year and compares it with that of the third quarter of the current year.
Consumer prices increased by the most in 14 months in August
Consumer prices increased by the most in 14 months in August as the cost of gasoline surged, but the annual rise in underlying inflation was the smallest in nearly two years, likely giving the Federal Reserve cover to leave interest rates unchanged next Wednesday.
The mixed report from the Labor Department on Wednesday was published a week before the Fed's policy meeting and followed data this month showing an easing in labor market conditions in August.
Economists, however, believe officials at the central bank will continue to signal an additional rate hike this year given the stickiness in services inflation.
The IRS has launched a plan to use improved technology and artificial intelligence to collect unpaid taxes from people with higher incomes, partnerships, and corporations.
The plans of the IRS to focus on high-level enforcement, including expanded use of AI, could result in catching higher-end tax issues within a few years.
Stocks finish mixed after data showed increase in August consumer prices
Wall Street closed mixed on Wednesday, and US Treasuries oscillated within a tight range after data showed underlying inflation remained on its slow, downward trajectory, cementing the likelihood that the Federal Reserve will let interest rates stand for now.
The S&P 500 gained modestly and interest-rate sensitive mega caps, led by Amazon and Microsoft, gave the tech-heavy Nasdaq the edge.
Welcome to AS USA's live financial blog!
We'll be reporting on other financial news affecting US consumers as the job market cools, consumer spending slows, and the Federal Reserve prepares to decide if interest rates will be increased once again at their next meeting.