US financial news | Summary news 18 August
Headlines: Friday 18 August 2023
- Consumer Price Index report released with inflation in July revealed to be 3.2%.
- $39 billion of student debt being wiped this week.
- Gas prices are up this summer as extreme heat hampers oil refinery operations
- 187,000 jobs added in July, unemployment falls to 3.5%
- 20% of student loan borrowers to pay $500 monthly when payments resume, according to study
Fed numbers show bank credit, loans drop in latest week
Bank credit at commercial banks shrank in the latest week as commercial banks pulled back on lending to businesses, data published by the Federal Reserve showed on Friday.
Overall bank credit fell to $17.23 trillion in the week ending Aug. 9, down from $17.25 trillion a week earlier and $17.32 trillion a year earlier, its second straight year-over-year drop.
Loans and leases fell to $12.13 trillion, from $12.15 trillion the week prior; commercial and industrial loans slipped to $2.74 trillion, from $2.75 trillion in the week ending Aug. 2. From a year earlier, commercial and industrial loan growth slowed sharply to less than 1%.
Mortgage rates continue to rise in the United States. On Aug. 8, the average annual percentage rate on 30-year fixed mortgages was 7.4%. Analysts expect mortgage rates to continue in that range for the rest of 2023.
Home sales fell nearly 19 percent compared to a year ago as median home prices are at $410,200 in the country.
As mortgage rates have been trending up, this report details how these rates will evolve, how much they will rise and how far they can go.
Chinese property company Evergrande has gone one step further from its 2021 default and declared bankruptcy in the US. While protecting its assets as financial solutions are found, huge debts and constant losses are causing a crisis in the Chinese property sector.
Real estate is 30% of China’s entire GDP, making the slow demise of one of the biggest companies a serious concern.
Chocolate makers' prospects dim as cocoa prices soar
Chocolate makers like Hershey and Mondelez face tougher trading conditions over the next year as they attempt to pass on soaring cocoa costs to cash-strapped consumers who are cutting back.
The industry has enjoyed bumper profits over the past couple of years as demand for chocolate held up despite price hikes, but data seen by Reuters shows this trend may be breaking just as prices for cocoa hit 46-year-highs and sugar prices are near their highest in more than a decade.
Consumers in North America and Europe have already seen price increases of about 20% over the past two years and are starting to cut back on the amount of chocolate they buy, data pulled for Reuters by market researchers Nielsen shows.
Consumers are "shopping around more, hoping to find deals," Mondelez CEO Dirk Van de Put said last month.
Cadbury-maker Mondelez expects inflation in cocoa and sugar to continue.
When purchasing a house, you’ll most likely have to take out a loan. Before going to a lender to apply, one of the key elements to keep in mind is the interest you will have to pay on your mortgage.
Several factors go into determining what interest rate you will have to pay on your mortgage. These include the type of loan you apply for, what the market rate is and your creditworthiness to name a few.
What are SNAP replacement benefits and who qualifies?
Affected beneficiaries have until October 13 to report the fraud or theft, which must have occurred between October 1, 2022 and August 13, 2023.
To claim the money, they will need to file a complaint with the MDHS Office of the Inspector General, Mississippi Department of Human Services. If they prefer, they can also call directly at 1-800- 299-6905.
It is back to school season in the US and, with vast changes to how and when families work, less people than ever take their kids to school. Usually no worries, right? A bus will come along, swoop them up and enable you to continue your working day.
At least this was the way things were working. USA Today has found every state to be struggling with keeping school bus runs going.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/5R4X3UYMRRKV3KUJD2VZFGJW3I.jpg)
As its name implies, replacement benefits are intended to repay those people who were victims of fraud or card cloning. The resources are administered by the state government, and for now, the measure applies to Mississippi residents.
Affected beneficiaries have until 13 October to report the fraud or theft, which must have occurred between 1 October, 2022 and 13 August, 2023.
Using an Electronic Bank Transfer (EBT) card
SNAP assistance offers monthly food stamps to families who struggle to put food on their tables. The amount depends primarily on the situation of each family, as well as the number of household members. Whatever the amount that beneficiaries receive, the money is deposited to an EBT debit card, which is accepted in markets and selected stores.
One of the most popular financial aid programs in the US is the Supplemental Nutrition Assistance Program, also known as SNAP.
Although SNAP is a federal program, the administration of payments is handled by state governments, which means that the requirements to apply, as well as the amounts, depend on the state in which the beneficiary resides.
In the case of Texas, the average payment is $281 per individual. However, there are families that may be eligible for a payment of more than $1,600 for the month of August.
Walmart wins over customers as inflation takes a toll
In Walmart's second quarter earnings release, the giant retailer posted same-store sales that rose 6.30%, more than the 4.04% expected, according to data from Bloomberg.
Foot traffic increased for the store by 2.8%, along with a higher ticket, up 3.4%. Online sales rose 2.3% in the quarter.
"Our customers and members are resilient," Walmart CEO Doug McMillon told investors.
"They're looking for value, and they trust us to be there for them. We see people across income cohorts come to us more frequently looking to save money on everyday needs."
The government gave out stimulus checks at the height of the pandemic to help Americans get through the particular financial difficulties that the situation brought about.
Though pandemic-era stimulus checks are no longer being sent out, some states continue to give financial aid to their residents in the form of income and property tax rebates. In the case of Montana and New Mexico, they are sending out checks because of their budget surplus.
Here are the states which which are distributing tax rebates.
Fed officials indicate another rate hike not off the table
The newly-released minutes from the Federal Open Market Committee’s July 25-26 meeting show that while some officials were prepared to continue June's interest rates hike pause, members continue to view inflation as a threat and are willing to hike rates further to address it.
Most participants "continued to see significant upside risks to inflation, which could require further tightening of monetary policy," according to the minutes.
Participants acknowledged that there has been a softening in core goods prices, but they also stressed that inflation remained "unacceptably high" and said they would need more evidence to be sure inflation was heading toward the committee's 2% goal.
Colorado has been ranked among the healthiest states in the country, and their latest program aims to ensure that this continues to be so.
The Colorado government has launched a state-wide program that will offer qualified residents up to $1,100 in rebates when they purchase an electric bike.
The first round to apply for the program began on Wednesday and will run until Monday, Aug. 21. You can submit your application at the Colorado Energy Office.
The scheme has been called the biggest e-bike rebate program in the country.
Good morning and welcome to AS USA's live financial blog!
New CPI inflation data for July was released last week. According to the Bureau of Labor Statistics, inflation climbed to 3.2% in the year leading up to July, driven by increased expenses in housing, car insurance, and food.
We will be brining you the latest on SNAP benefits news as well as Social Security updates.