US Financial News: news summary | 22 July 2023
US finance news: live updates
Headlines: Saturday 22 July 2023
- Initial unemployment claims drop by 9,000 from last week to 228,000
- Weekly average mortgage rates dip to 6.78% for 30-Yr fixed rate and 6.06% for 15-Yr fixed rate
- Latest retail data showed US consumers still shopping, but less than expected
- Interest rate hike expected when Fed policymakers to meet next week
- SNAP recipients whose benefits were 'skimmed' can get reimbursed
- Inflation in the US dropped to 3% in June,lower than forecast
- June jobs report: The US economy added 209,000 jobs in June as labor market cools
- How to participate in the SNAP Program as a merchant
- The White House announces the SAVE planto help student loan borrowers
The Federal Reserve agreed to hold interest rates steady in their June meeting but is expected to raise them when they meet again later this month.
The Federal Reserve heldinterest rates steady at 5%-5.25% during their June meeting following an aggressive campaign of rate hikes intended to control rising inflation. However, they are expected to announce more increases before the year ends, including one during their July meeting.
Although the Fed held off on a hike in June, credit cardholders may have had their bills affected after the May increase. The 0.25 percentage point interest rate hike is likely to have caused higher bills since it was announced then.
UPS, Teamsters to resume talks on Tuesday
United Parcel Service said it plans to resume labor talks with the Teamsters union representing 340,000 employees on Tuesday, in an effort to avert a strike that could disrupt supply chains and harm the economy.
The two sides began talks in April on a contract covering the company's drivers, package handlers and loaders. Talks broke down on July 5 with each side blaming the other.
UPS said it hope to "resolve the few remaining open issues" at the meeting.
A spokesperson for the International Brotherhood of Teamsters pointed to a statement detailing its goals for a five-year agreement that increases pay and full-time jobs, and strengthens protections for workers.
An existing five-year labor pact expires on July 31
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Employment to grow in fields involved in fighting climate change
If you want to fight climate change full-time, the opportunities to do so will increase over the coming years. The near future will demand jobs with a climate component, whether it’s financiers, farmers, accountants or policymakers, according to Yale’s Anthony Leiserowitz.
The director of the school’s program on climate change communication says many fields of employment will need some expertise on climate change.
Environmental and sustainability studies are booming in colleges, and Gen Z and millennial workers surveyed say climate concerns are a factor in their choice of jobs.
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New York is at the top of the list of the most expensive cities for renters in the US, making it difficult for residents to afford housing in the area.
According to the New York City Housing Authority (NYCHA), they provide “decent and affordable housing in a safe and secure living environment for low- and moderate-income residents throughout the five boroughs.”
The rent will be based on your family’s income, and for most buildings, electricity and gas are included in the rent.
You don’t need to be a citizen to apply for the program, as long as there is at least one person in your household who is a citizen or has legal immigration status.
You must first determine if you are eligible for housing assistance, then submit an application on the NYCHA website. After you’ve applied, you will have to wait for an eligibility interview.
But who are eligible for public housing? Gidget has the answers.
The Child Health Insurance Program is a federal program that provides health insurance coverage to children from low-income families. Established in 1997, CHIP is jointly funded by both the federal government and individual states.
The program provides health coverage to millions of children and families whose incomes are too high to qualify for Medicaid but are not able to afford private health insurance.
You can then apply for Florida KidCare and Healthy Kids online, which has open enrolment the whole year. Once you’ve completed your application, it takes around six weeks to process.
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What is the maximum income to qualify for CHIP in Florida?
Gidget has done the maths and explained the requirements and payments for all those interested in finding out the maximum income.
SSA payments continue throughout the whole year, meaning that you don’t have to worry about them stopping any time soon.
In fact, the payment schedule for 2023 has already been published: you can find out exactly when in the month the payments will be made, as well as checking the average increases that have occurred.
The Social Security payments change each year depending on the cost of living, and in 2024 they are set to increase again.
The amount on offer went up in 2023 due to inflation, and in 2024 while they are still set to increase further, the amount will be smaller.
What are SNAP Benefits?
SNAP is a government assistance scheme that supplies eligible low-income individuals and families with funds for food.
Who will receive payments on July 23?
SNAP benefits are put on the EBT cards every month. However, payment dates vary from state to state despite being a federal program.
Some states send money at the beginning of the month, while others send the funds during the first three weeks of the month in batches based on name, Social Security number, case number, or account number, with the 23rd being the last pay day at various entities.
Corina and Gidget have put together this handy explainer that answers questions regarding the who, how, where and when on SNAP Benefits.
Government vows to take hard line with airlines re: consumer protection
Transportation Secretary Pete Buttigieg said he is willing to take a hard line with airlines when necessary as the Biden administration vows a sweeping upgrade in passenger consumer protections.
"We're continuing to work to make sure that airlines live up to their obligations, which we will enforce," Buttigieg told Reuters.
US airlines have sparred with the administration in recent years over responsibility for flight delays, passenger rights, landing slots and other issues. Carriers and a federal audit say the Federal Aviation Administration must boost air traffic control staffing.
Buttigieg has opened numerous investigations and imposed fines for carrier misbehavior. President Joe Biden has often criticized airlines, saying in February "airlines can’t treat your child like a piece of baggage."
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Looking for positives in climate change
By this stage, most of us will be well aware of the dangers posed by climate change. Perhaps something that hasn't be discussed too much is the effect it could have on the job market. Whether you're just simply searching for any position you can get, hoping for a career that can help the planet or looking to break into a growing field that could turn out to be lucrative, here are a few ideas.
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The good things about shared bank accounts
"We find that the people who have joint accounts are actually reporting greater financial harmony," said Olson. "In other words, they're more satisfied with how they and their partner are saving and spending, there's less financial conflict, and we see that this improves over time", says Dr. Jenny Olsson, who led a study into joint bank accounts published in the Journal of Consumer Research.
Not only are joint accounts good for love, she says, but they're also good for finances.
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How can I save on my monthly insurance bill with a Premium Tax Credit?
Let's be honest, everyone is looking for ways to save money (that might well be why you're here). Well, good news, as Americans at all income levels can have their monthly health insurance bill reduced with an advance payment of the Premium Tax Credit.
Greg Heilman is here to explain how that works and what exactly you need to do.
How skiplagging could cost you, rather than save you money
Ever heard of skiplagging? It's become a popular way for people to save money while travelling. A traveler books a multi-leg flight with a connection. Instead of flying to the final destination, the passenger opts to disembark at the connecting city, which, surprisingly, is often cheaper than flying directly to your destination in the first place.
Many airlines, however, have cottoned on to the practice and punish anyone whose intentions are discovered. Here's more.
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US' banks reserves steady
A feared liquidity drainage in the U.S. banking system hasn't yet materialised, with reserves actually increasing recently as the Treasury refills its coffers has not materialised yet, alleviating concerns that the bond spree could lead to more credit tightening.
Since early June, the Treasury General Account at the Fed has gone up by about $460 billion. In the week ending on July 19 reserves increased by about $58.5 billion to $3.22 trillion, while demand for the Fed's overnight reverse repo facility (ON RRP) declined by $87.3 billion.
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In 2021, 3.5 percent of children in California lacked access to health insurance, according to researchers at Georgetown University. California is the largest state in terms of population, and compared to Texas and Florida —the two following most populous states— the rate of children without access to healthcare is much lower. In Texas, the figure was 11.8 percent, and in Florida, it was a touch lower at 7.3 percent.
California has expanded Medicaid and the Medi-Cal for Kids program to provide insurance coverage to more children. Currently, Medi-Cal covers one-third of the state’s residents. Although some critics see it as a significant public expense, the reality is that when people lack insurance, the health problems of those without insurance often go untreated until they require major interventions, which are much more expensive.
As you know, the SS retirement benefit is a monthly check that replaces part of your income when you reduce your hours or stop working altogether. It may not replace all your income so it's best to identify other ways to pay for your monthly expenses as you age.
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On a monthly basis, the Social Security Administration sends money to various beneficiaries, including retired workers and survivors. It also mandates disability payments, which include the Supplemental Security Income program and Social Security Disability Insurance.
The SSA has already sent some payments for this month and is preparing to send the last payment on July 26.
Be educated on student tax benefits
As the IRS stressed, tax credits, deductions and savings plans can help taxpayers with their expenses for higher education. Learn more on how:
- A tax credit reduces the amount of income tax you may have to pay.
- A deduction reduces the amount of your income that is subject to tax, thus generally reducing the amount of tax you may have to pay.
- Certain savings plans allow the accumulated earnings to grow tax-free until money is taken out (known as a distribution), or allow the distribution to be tax-free, or both.
- An exclusion from income means that you won't have to pay income tax on the benefit you're receiving, but you also won't be able to use that same tax-free benefit for a deduction or credit.
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Currency markets update
Reuters reported yesterday that the yen weakened against the dollar, stating that the Bank of Japan is likely to maintain its key yield control policy unchanged in the upcoming week. BoJ policymakers want to analyze more data to ensure rising wages and inflation before considering any policy changes. The decision is not yet certain, and there might not be a consensus within the central bank.
Analysts expect the BoJ to maintain its yield curve control while possibly upgrading its inflation outlook. However, there is a possibility of a surprise policy shift. The speculation arises as Japan's core inflation has been above the BoJ's 2% target for over a year.
As a result, the dollar gained significantly against the yen, reaching its highest level since July 10. It is on track for its best weekly gain against the yen since October.
Next week will see central bank meetings in the U.S. and Europe. The Federal Reserve and the European Central Bank are both expected to raise rates by 25 basis points. Investors will closely watch comments from Fed Chair Jerome Powell for clues on future rate hikes.
Traders are pricing in additional tightening this year, with rates expected to peak at 5.41% in November. Some economists believe this could be the last rate hike in this cycle, but a dovish pivot seems unlikely.
Overall, the dollar is performing well against major peers, with the dollar index rising to its highest level in two months. The euro and pound have weakened against the dollar due to various factors, including the prospects of rate hikes in the U.S. and economic data in the UK.
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.
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Where to find the best back-to-school deals
More than half (55%) of consumers started their back-to-class shopping early July this year, but most shoppers (85%) said they still had at least half of their shopping left to do.
One reason for spacing out spending is the price of school supplies. Back-to-school shoppers have seen prices rise 24% in the past two years, according to consulting firm Deliotte.
Bargain shopping will be key for many consumers this year, with consumers stretching their dollars by comparing prices and considering off-brand or store-brand items.
USA Today offers a list of outlets with back-to-school deals.
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Amazon brings palm payment technology to Whole Foods
At Amazon's Whole Foods, shoppers can now pay with the palms of their hands.
The consumer tech giant announced plans to bring its palm-payment technology, dubbed Amazon One, to all 500-plus Whole Foods locations in the US by the end of this year. This means customers can hover their hand over an Amazon One device at checkout to pay with the card linked to their Amazon account and automatically apply savings.
Currently, the technology is available at more than 200 locations in the US in Arizona, Colorado, Idaho, Kansas, Louisiana, and Oklahoma, among other states.
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SNAP recipients in can receive money back that was scammed. Scammers using ‘skimming’ devices to steal Electronic Bank Transfer (EBT) cards from some of America’s poorest families have taken millions of dollars.
However, to counter this, spending plans announced by the US Department of Agriculture last December requires states to reimburse stolen funds. Maryland was the first state to have their plan approved, rescuing $2.5 million for nearly 4,000 victimes.
Initial unemployment claims fall for second straight week
The US Department of Labor released unemployment insurance data for the week ending 15 July which showed initial claims fell by 9,000 to 228,000. The number of first-time claimants has dropped for two weeks in a row and over the past month has decreased from 265,000 the month prior. That was the highest level since October 2021.
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The distribution of Supplemental Nutrition Assistance Program (SNAP) benefits, formerly known as food stamps, continues.
SNAP is a federal program that, in coordination with state governments, provides benefits to low-income families to buy food. Each month, states deposit financial assistance onto an electronic benefits transfer (EBT) card, which works like a debit card that can be used at certain approved locations.
Netflix revenue disappoints Wall Street
Streaming giant Netflix disappointed Wall Street earlier this week with second-quarter revenue that fell short of analyst estimates, sending shares tumbling nearly 9% in after-hours trading.
The revenue figure, along with a weaker-than-expected forecast for revenue in the third quarter, overshadowed the addition of 5.9 million new streaming customers from April through June and earnings that easily topped predictions.
Home sales at slowest pace since 2009
We have been reporting recently that sales of previously owned homes dropped 3.3% in June from the month before to an annualized rate of 4.16 million, according to the National Association of Realtors. June home sales were 18.9% lower compared with last year, the slowest sales pace for June since 2009. This is also lower than the 4.3 million unit sales predicted by economists polled by Bloomberg.
The share of homes available for sale shrank to a historic low leaving potential buyers with fewer options. First-time buyers are also waiting longer to buy. They were responsible for 27% of sales in June, down from 28% in May and 30% in June 2022, per Yahoo Finance.
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New York City is known for its high cost of living, and consistently makes it to the list of most expensive places to live in the US. One factor that contributes to its pricey nature is the cost of housing.
According to Insider Monkey, New York is the most expensive US city for renters, with the average rent for a one-bedroom apartment standing at $3,570.
In light of these exorbitant figures, the New York City government is offering affordable housing to people with low to moderate income.
AS USA's live finance blog: welcome
Hello and welcome on Saturday 22 July 2023.
Follow along, or check in from time to time, as we bring you the latest information on SNAP benefits, IRS refunds and Social Security benefits.
Likewise, we'll keep you informed on how the US economy is performing as the Federal Reserve raises interest rates to bring inflation back to its 2% target.