US financial news summary | 3 August 2023
Headlines: Thursday 3 August 2023
- Job openings fall to lowest level in more than two years in June
- Fitch downgrades US credit rating, surprising investors
- Biden administration launches new student debt repayment plan
- Federal Reserve has 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%
- Initial unemployment claims fell by 9,000 in week ending 15 July, to 228,000
Take a look at related AS USA news articles:
Rating agency Fitch downgraded the US government’s top credit rating earlier this week, from AAA to AA+. The last time the US had its credit rating downgraded was 5 August 2011. This was the first time the rating had fallen below AAA and was the result of another drawn-out debt ceiling negotiation procedure.
There are several implications for a country and its economy if its credit rating is downgraded.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/SXMC6Q62MZLVZMDJ7IBN6JX2KQ.jpg)
The SAVE plan aims to lower monthly payments for borrowers and eliminate them entirely for individuals who meet the income criteria. It will also halt the accumulation of unpaid interest as long as repayments are made promptly.
It is very simple. You simply have to be enrolled in an IDR plan for paying back your student debt.
Lacklustre support for new parents in the US
Many other countries have more robust family leave policies that include generous and paid maternal leave compared to the US. For example, several European countries offer several weeks or even months of paid paternal leave, which can be taken concurrently or independently of the mother's leave. Nordic countries, in particular, are known for their progressive family leave policies.
Family leave, also known as parental leave, are the protections offered to families with newborn children.
The federal minimum of twelve weeks of unpaid leave is paltry compared to the rest of the developed world. It is the only one of the 38 OECD nations to not have paid maternal leave as standard while the amount of time itself is below the World Health Organisations’ recommendation of a 16-week minimum.
Which individual states offer paid support for new families?
Beer can company misses revenue estimates on Anheuser-Busch disruption
Ball Corp fell short of Wall Street estimates for second-quarter revenue on Thursday as the world's largest supplier of beer cans was hit by sales disruption at a major brewer.
Anheuser-Busch, which accounted for 13% of Ball's consolidated net sales in 2022, has seen a drop in US sales of its Bud Light beer following a conservative backlash over a promotion involving a transgender influencer.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/CK6PIQHP7NC4ZF3FHPBAJM4VNY.png)
Last year, several states decided to send financial aid to their residents to help them deal with inflation that reached record levels, in addition to high prices of fuel and groceries.
Although inflation has fallen considerably in recent months, several states across the country continue to send stimulus checks or tax refunds to continue helping their residents.
Here are the states that will deliver financial aid in August.
Yellen: Fitch downgrade 'unwarranted' amid US economy's strength
Treasury Secretary Janet Yellen voiced more complaints about Fitch Ratings' downgrade of the main US credit rating, calling it "entirely unwarranted" because it ignored improvements in governance metrics during the Biden administration and the country's economic strength.
Yellen said the rating agency's announcement on Tuesday failed to take into account a resilient US economy, with low unemployment, falling inflation, continued growth and strong innovation.
She said Fitch's "flawed assessment" was based on outdated data and failed to reflect improvements in governance indicators over the past two and a half years of President Joe Biden's administration.
(REUTERS)
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/SKIHEEZGQJOWND2QWGE2S7IVJU.jpg)
Each month, millions of beneficiaries receive money from the Social Security Administration, many of them retired workers and survivors.
The SSA also sends out disability benefits which include the Supplemental Security Income program and Social Security Disability Insurance.
Some beneficiaries may be entitled to receive up to $4,555 each month.
Find out who will receive them in August, and when the dates are.
Weekly salary goes up 5.7% year-on-year for second quarter
Median weekly earnings of the 121.5 million full-time wage and salary workers in the US increased from $1,041 in the second quarter of 2022 to $1,100 in the second quarter of 2023, a gain of 5.7 percent.
This compared with a gain of 4.0 percent in the Consumer Price Index for All Urban Consumers over the same period.
The government has banned the sale of common incandescent light bulbs effective August 1 to implement a new energy efficiency standard.
The Department of Energy finalized a rule in April 2022, stating that bulbs must emit a minimum of 45 lumens per watt. This effectively excludes the common incandescent bulb found in many homes, as these usually produce only 15 lumens per watt.
The new rule aims to lessen carbon emissions and help consumers cut down on their electricity bills.
Job openings hit more than two-year low; labor market still tight
Job openings fell to the lowest level in more than two years in June, but remained at levels consistent with tight labor market conditions, which could spur the Federal Reserve to keep interest rates elevated for some time.
Labor market resilience was underscored by the third straight monthly decline in layoffs as employers hoard workers after difficulties finding labor during the COVID-19 pandemic. There were 1.61 job openings for every unemployed person in June, up from 1.58 in May.
The report from the Labor Department however suggested workers are growing a bit less confident in the labor market, with resignations plunging by the most since April 2020. Fewer workers changing jobs over time bodes well for slowing wage growth and ultimately overall inflation.
(REUTERS)
Don’t worry about the final application date for debt forgiveness, there won’t be any further changes until after the next election. But there is a recently-announced other option for people looking for any support in the ever-increasing student debt sinkhole.
Student debt is hanging around
Student debt forgiveness is off the cards and has been since the Supreme Court struck down the plan last month.
Under that plan, 40 million students with outstanding debt could apply for the forgiveness program which would have struck down $10,000 of debt per person.
Credit scores are representations of an individual’s creditworthiness and are used by lenders to assess the risk of lending money to a person. The specific factors and their weightings used to calculate credit scores may vary depending on the credit scoring model, such FICO.
Our report tells you more about the main factors that generally determine a credit score.
Good morning and welcome to AS USA's live financial blog!
Job openings fell to the lowest level in more than two years in June, but remained at levels consistent with tight labor market conditions.
Ratings agency Fitch has downgraded the US government's top credit rating, a move that drew an angry response from the White House and surprised investors
With student loan repayment set to start in October, much focus is on SAVE, President Joe Biden’s new student debt repayment plan.
Also, in the wake of the Federal Reserve's recent move to raise interest rates, we will be examining its implications and how it is aimed at tackling inflation in the US.
We will also be providing real-time coverage of crucial topics like SNAP benefits and Social Security payments.