US financial news summary | 8 August 2023
US financial news: Tuesday 8 August 2023
Headlines: Tuesday 8 August 2023
- Consumer Price Index report with latest inflation numbers to come out Thursday
- Inflation in the US was at 3% in June, as Fed bids to cut rate to 2%
- Gas prices are up this summer as extreme heat hampers oil refinery operations
- 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
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After being extended multiple times, the moratorium will end at the end of August with student debt payments resuming on 1 September. With 70% of borrowers not knowing that payments are to resume, this will be a worry for many having to trump up hundreds of extra dollars a month. Debt forgiveness plans died in the Supreme Court earlier this year.
However, there is a one-year leniency program that will begin 1 October, 2023 and end on 30 September, 2024 to help borrowers avoid the harshest consequences of missed, partial or late payments,” according to the Education Department.
The Federal Reserve raised interest rate to 5.5%, its highest level since February 2001, following the Federal Open Market Committee meeting on 26 July. It was the 11th successive rate hike since March 2022 when the Fed began its campaign to cool the economy and get inflation under control.
There will be three FOMC meetings between now and the end of the year - 19-20 September, 31 October-1 November and 12-13 December, so three opportunities for the Fed to raise interest rates again to 5.75% or higher.
he 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.
Many taxpayers already file their returns electronically, but there are those who still mail in paper returns, which the IRS has had difficulty in digitally processing.
This, however, will change next year.
High Deductible Health Plans and Health Savings Accounts 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.
Trucking company Yellow files for bankruptcy, blasts Teamsters
Some 30,000 workers at Yellow Corp. are looking for jobs after the major trucking company filed for Chapter 11 bankruptcy protection, potentially saddling taxpayers with losses from a government rescue of the long-troubled carrier.
The nearly 100-year-old company, which halted operations on July 30, has been a dominant player in the "less-than-truckload" segment that hauls cargo for multiple customers on a single truck.
It laid blame for the bankruptcy, likely the largest ever for a US trucking firm, at the feet of the International Brotherhood of Teamsters union that represents about 22,000 of its employees.
Teamsters leadership "was able to halt our business plan, literally driving our company out of business," Yellow CEO Darren Hawkins said in a statement.
Meanwhile, the International Brotherhood of Teamsters blamed Yellow executives for the company's demise.
(REUTERS)
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Despite the Fed raising interest rates to their highest level in 22 years, economists have been stating that they no longer expect a recession. 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”.
The threat of severe weather has caused the grounding of flights in various airports across the Eastern US, leading to thousands of flights being delayed or canceled.
The Federal Aviation Administration said they were “re-routing aircraft around the storms heading to the East Coast as much as possible” in a social media post.
Delays and cancellations are frustrating for any traveler, but people do have some rights when these unfortunate events take place.
Stocks suggest 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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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.
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.
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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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?
Supplemental Nutrition Assistance Program benefits are designed to help low-income families who struggle to put food on their tables.
Through this economic assistance, the federal government grants food aid that is deposited each month into an economic benefits transfer card, which is valid for use in selected stores.
Texas residents will need to complete a new process this month to avoid losing their SNAP payments. Here’s how to make sure your case remains active.
Good morning and welcome to AS USA's live financial blog!
This week, we will be awaiting the Consumer Price Index report that will come out on Thursday for the latest inflation update.
Gas prices are up this summer as heat waves affect oil refinery operations.
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.