US financial news summary | 7 August 2023
Headlines: Monday 7 August 2023
- Consumer Price Index report with latest inflation numbers to come out Thursday
- 187,000 jobs added in July, unemployment falls to 3.5%
- Treasury Secretary Yellen calls US credit rating downgrade "entirely unwarranted"
- Biden administration launches new student debt repayment plan
- Federal Reserve announced a 0.25% hike in interest rates
- Inflation in the US was at 3% in June, as Fed bids to cut rate to 2%
Take a look at related AS USA news articles:
How much unemployment will I get if I make $800 a week in NY?
Your state considers the specifics of your work history and how much you previously earned in order to determine how much your benefit amount would be. If you make $800 a week in New York, your estimated weekly benefit would be $416 for up to 26 weeks, according to FileUnemployment.org. You can also check their unemployment calculator to determine the amount that would be more appropriate for your particular situation.
New Yorkers can also get an estimate of their weekly benefit using the calculator of the New York State government. They also provide approximate amounts of partial unemployment benefits.
Best ways for Americans to pay off their credit card debt
The numbers don't look great. The average credit card rate is now at an all-time high, 47% of borrowers carry over card balances each month and of those who are carrying a balance, 60%, or roughly 54 million people, have been in debt for at least a year. That's all according to a Bankrate report.
So, what can those affected do?
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Stocks suggests the AI bubble could be popping
Artificial Intelligence has been the talk of the town for much of the year which has had an effect on stocks, which soared heading into the summer. However, recent trends have led to suggestions that the AI stock bubble may be "popping".
Is interest in the technology really fading? The AI boom could be in its "late innings", according to Morgan Stanley equity strategist Edward Stanley.
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What are the best and worst US states to retire in?
A recent study carried out by Bankrate has revealed that Alaska is the worst US state in which to retire (the weather, presumably, doesn't help). All 50 states were ranked according to number of factors, namely affordability, well-being, health-care quality and cost, weather (there it is) and crime.
The findings of the study revealed the top five were (in this order) Iowa, Delaware, West Virginia, Missouri and Mississippi.
The bottom five were Massachusetts, Washington, California, New York and Alaska (from least worst to worst)
Banks warn of interest income weakness after upbeat quarter
Comerica and Huntington Bancshares have sharply cut their interest income growth forecasts for 2023, the latest banks to sound the alarm over faltering loan demand and a rise in deposit costs.
The Federal Reserve's fastest monetary tightening cycle since the 1980s helped lift lenders' net interest income in the second quarter, but the high rates are forcing some customers to rethink taking loans and buying big-ticket items.
The high interest rate environment is also forcing lenders to boost deposit rates to prevent clients' money from fleeing to high-yielding alternatives like money market funds.
IRS: The paperless processing initiative
The agency’s effort, called the paperless processing initiative, will give taxpayers the option to go paperless for IRS correspondence by the 2024 filing season, including responses to notices.
Many of the most commonly used non-tax forms will be available in digital, mobile-friendly formats, facilitating the ease of submission. One of these forms is the Request for Taxpayer Advocate Service Assistance, which will make it easier for taxpayers to get help for their concerns.
People will also have the option of filing 20 additional tax forms electronically, which means that up to four million more tax documents will be filed online each year.
IRS encourages tax return filing
Despite it being the beginning of August with many people on vacation, the Internal Revenue Service encourages people to file their 2022 tax returns as soon as possible.
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In the United States, a little more than $2,000 a month is paid for services and household bills on average. According to the 2023 US Bill Payment Market Report by bill payment service Doxo, the average household spends $2,046 per month and $24,557 per year on these costs.
This report breaks down household costs state by state based on the 10 most common service categories.
Wall Street reacts to downgrade of US credit rating
Treasury Secretary Janet Yellen called the Fitch Agency's downgrade of the United States' credit rating "unwarranted", as it appeared to ignore the country's economic strength.
Wall Street has weighed in on the matter, and by all indications, the move was confusing to them as well.
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The US has had a run of stable pump prices the past few months, but now that we are in the middle of summer, they’re on the rise again.
Gas prices can go up for a variety of reasons, and they can be subject to rapid and sometimes unpredictable changes. In the past month, they have climbed up almost 30 cents higher to an average $3.83 per gallon throughout the country, according to AAA.
As far as this summer’s fluctuations are concerned, there are several culprits responsible for the increase.
Inflation reached four-decade highs in the middle of 2022, and the Federal Reserve has announced 11 interest rate hikes since March of last year to fight soaring prices.
As the central bank continued to announce increases, there were concerns of the US heading into a recession.
Despite the Fed raising interest rates to their highest level in 22 years, economists have been stating that they no longer expect this to happen. Last week, the Bank of America became the first large Wall Street bank to backtrack on its recession forecast.
Instead, hopes are high that the country is heading towards a “soft landing”.
187,000 jobs added in July, unemployment falls to 3.5%
The US economy added fewer jobs than expected in July, but solid wage gains and a decline in the unemployment rate back to 3.5% pointed to continued tightness in labor market conditions.
The Labor Department's employment report also showed job gains in May and June were revised lower, potentially suggesting demand for labor was slowing in the wake of the Federal Reserve's hefty interest rate hikes.
But with 1.6 job openings for every unemployed person in June, the moderation in hiring may also be the result of companies failing to find workers.
The mixed report did not change growing perceptions among economists that the Fed could engineer a "soft landing" for the economy, though much would depend on the direction of inflation after annual increases in prices slowed sharply in June.
(REUTERS)
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Each month, the Social Security Administration sends money to different beneficiaries, including retired workers and survivors, who are the children, spouses, widows, widowers or parents of a deceased beneficiary.
The SSA also sends disability benefits to recipients of the Supplemental Security Income program and Social Security Disability Insurance.
Although only one monthly payment is usually sent, in some months of the year, some recipients receive two checks, while others receive none.
The latest figures from the Labor Department indicate that unemployment in the US has gone down to 3.5%, just above the lowest level since late 1969.
The national unemployment rate has ranged from 3.4% and 3.7% since March 2022, but what are the numbers for the major states of the country?
Are senior citizens in the United States among the developed world's poorest?
About 23% of Americans over age 65 live in poverty, according to the Organization for Economic Co-operation and Development, which ranks the US behind 30 other countries in the 38-member bloc, which collectively has an average poverty rate of 13.1%.
However, other metrics suggest that the situation is not quite as bleak as that. So, which is it and why is it such a complex matter to get to the bottom of?
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Wells Fargo has been dealing with a glitch that makes customers unable to view or access money in their accounts. The bank's clients began reporting the issue on Thursday, and Wells Fargo clarified that the issue did not affect all its customers.
According to latest reports, the bank said the issue has been resolved.
Here’s what to do if this problem has happened to you.
Cash back credit cards are a type of card that offers holders a percentage of their purchases back in the form of cash rewards.
These rewards are typically a percentage of the total amount spent on the credit card, and they can be redeemed as a statement credit, a check, or a direct deposit into a bank account. Sometimes, they can be claimed as a gift card or merchandise.
Things to look out for in the world of finance this week
A new week is beginning, so what do we need to keep an eye on in the world of finance?
Stocks have had a tough start to the month of August, which wasn't necessarily expected, how will they react moving forward?
Meanwhile, the labor market also dropped off last month, with fewer jobs added that had been expected. At least the unemployment rate in the US has fallen.
A Consumer Price Index report will come out on Thursday which will give us an inflation update. How much of a rise is anticipated?
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Good morning and welcome to AS USA's live financial blog!
It's a new work week and we will be awaiting the Consumer Price Index report that will come out on Thursday for the latest inflation update.
Latest figures from the Labor Department show that 187,000 jobs were added in July, while the unemployment rate went down to 3.5%.
Treasury Secretary Janet Yellen called Fitch Ratings' downgrade of the main US credit rating "entirely unwarranted" because it ignored the country's economic strength.
With student loan repayment set to start in October, much focus is on SAVE, President Joe Biden’s new student debt repayment plan.
We will also be providing real-time coverage of crucial topics like SNAP benefits and Social Security payments.