US financial news summary | 5 August 2023
Headlines: Saturday 5 August 2023
- 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%
- Initial unemployment claims fell by 9,000 in week ending 15 July, to 228,000
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Jobs most vulnerable to Artificial Intelligence
About one in five workers have jobs with key tasks that are more likely to be aided or replaced by AI, according to a recent report from Pew Research Center.
The findings, based on an analysis of federal data, found that jobs that rely on analytical skills like critical thinking, writing, science and math tend to be "more exposed" to the emerging technology. Interestingly, workers in industries more exposed to AI are more likely to say they think it will help rather than hurt their jobs.
The report noted that it’s unclear how many jobs are at risk due to AI, although some findings suggest jobs are already being lost to the technology. AI contributed to nearly 4,000 job cuts in May, according to a report from Challenger, Gray & Christmas.
Gas stations' high profit margins costing drivers more
Aside from the price of oil, another factor has been pushing fuel costs higher for the last three years: gas station profit margins.
New research by economist Michael Havlin shows that the profit margin on gasoline is about 77% higher than in May 2019, the first month for which government data is available. Compared with February 2020, before the covid-19 pandemic erupted, gasoline margins are 62% higher. The latest numbers are for May 2023.
The profit margin on gas was about 6.7% in 2019, so at current levels, it’s close to 12%.
The Internal Revenue Service has launched a campaign to digitize all tax returns that are filed on paper by 2025. When this is done, taxpayers are expected to receive their refunds up to four weeks earlier, while the time to process returns is projected to be cut in half.
The IRS has been unable to provide many of its forms online. This, however, will change next year.
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.
Based on utility bill payments, here are the most expensive and cheapest states to live in.
While an agreement was found between Republicans and Democrats to raise the debt ceiling earlier this year, financiers are unhappy at how long it took to be negotiated. The closer the US got to the financial abyss, the higher the cost of government borrowing was; investors were worried the country could slip into peril and damage the economy.
As a result, rating agency Fitch downgraded the US government’s top credit rating earlier this week, from AAA to AA+.
As our coverage details, a credit rating downgrade has many knock-on effects as investments are judged to be less safe, potentially pulling money out of the economy.
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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A new month has arrived and with it the distribution of another round of SNAP coupons.
Supplemental Nutrition Assistance Program benefits are designed to help low-income families who struggle to put food on their tables.
All SNAP recipients need to have their case considered “active” for some time due to the certification period. This means that they must be certified periodically to continue receiving benefits, in a process known as “recertification”.
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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 (SSI) 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.
Homebuyers need to earn 13% more than last year to get a starter house
A new study shows that homebuyers must earn 13% more than a year ago to afford the typical starter home in the US, according to Yahoo Finance.
Entry-level buyers had to make an annual salary of at least $64,500 in June to afford the typical starter home, according to real estate brokerage Redfin, up from $57,300 a year ago. Redfin defines affordable as no more than 30% of a buyer’s income going to a housing payment.
These conditions reflect the increasing house prices and high mortgage rates, along with such economic factors as inflation and wages not increasing as quickly as shelter costs.
High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs) are components of a healthcare strategy that can potentially reduce your healthcare costs while offering certain tax advantages.
Here’s how they work and how they can help you save money.
The unemployment benefits system in the United States involves government programs designed to provide financial assistance to people who are actively seeking employment but are currently without a job.
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, how much would your estimated weekly benefit be?
Good morning and welcome to AS USA's live financial blog!
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. The downgrade also 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.
We will also be providing real-time coverage of crucial topics like SNAP benefits and Social Security payments.