US financial news summary | 29 August 2023
Headlines: Monday 28 August 2023
- Markets rebounded on Friday with only the Dow Jones finishing the week in the red
- Fed Chair Jerome Powell indicated that another interest rate hike may be necessary
- Weekly average rate of 30-Yr fixed-rate mortgages rise for fifth straight week
- Initial unemployment claims dropped to 230,000 last week
- Existing-home sales fell in July, prices rose for first time in five months
- White House launches SAVE, its new income driven student loan repayment plan
-Minimum wage in Florida set to increase in September
- New requirements to receive SNAP benefits in 2024 set to take effect soon
- Gas prices are up this summer as extreme heat hampers oil refinery operations
- 20% of student loan borrowers to pay $500 monthly when payments resume, according to study
Why are gas prices on the rise again?
The heat is returning, and we are also entering the heart of hurricane season. While fewer drivers are fueling up at the moment, these looming weather concerns are a roadblock to falling pump prices.
Fuel prices are steadily rising in the US. Usual lower summer demand coupled with the global price of oil falling had kept prices decreasing since the highs of February 2022.
However, the beginning of hurricane season and slowing production in key oil mining states are changing this.
How much will the Social Security COLA increase in 2024?
The Senior Citizens League, a non-profit advocacy group, in their most recent estimate predicts that the 2024 COLA increase will be around 3 percent when it is announced. Such an increase would translate to an extra $53.70 per month for beneficiaries that receive the average monthly benefit of $1,789.
While inflation is significantly lower than a year ago, the organization reports that a majority of older Americans that responded to a recent survey said that “persistently high prices still affect their household budgets.”
Social Security beneficiaries saw a record cost-of-living adjustment (COLA) increase for 2023. The monthly payments the Social Security Administration sends out were given an 8.7 percent boost to help recipients keep up with price rises not seen in four decades.
That is due to how and when the COLA is calculated each year.
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Supplemental Security Income (SSI) recipients will receive two payments in September.
According to SSA’s schedule, SSI payments are sent on the first day of each month. However, if the first day falls on a weekend, the payment will be sent in advance. If the first of the month falls on a Saturday or Sunday, the payment for that month is sent the Friday before during the previous month.
Nordstrom closes flagship store in downtown San Francisco
Nordstrom shuttered its marquee store in the heart of San Francisco following through on plans announced in May. The company’s chief executive of stores, Jamie Nordstrom, said in a statement at the time: “The dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully.”
The move comes days before its lease was set to expire in the San Francisco Center mall and two months after Westfield abandoned the same mall. Another factor that “definitely” had some role in the Seattle-based retailer’s decision according one employee was crime and said that “COVID had a big impact.”
Nordstorm will refocus resources on sixteen other stores around the Bay Area.
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In the United States, the federal minimum wage has been $7.50 an hour for about 14 years, marking the longest period without an increase since the base salary was created in 1938.
However, 30 states, including California, Florida, and New York, as well as the District of Columbia, have adopted wages above the federal minimum.
Some of these states have legislation that establishes automatic increases at the beginning of the year, while others link the increases to salaries in relation to changes in the cost of living and inflation.
That is why in 2024, workers in several states will see an increase in their hourly minimum wage.
US commerce secretary in China to boost business ties
Commerce Secretary Gina Raimondo arrived in Beijing for a four-day visit aimed at boosting business ties between the world's two largest economies while declaring American national security trade measures off-limits for debate.
"If you wanted to put a tagline to the trip and the mission, it’s protect what we must and promote where we can," Raimondo told reporters before departing for China. "I'm not going to pull my punches next week when I am there but I intend to be practical."
Relations are tense as the US works with allies to block China's access to advanced semiconductors, while Beijing is restricting shipments from prominent chip company Micron Technology and raided and fined US firm Mintz Group $1.5 million for doing "unapproved statistical work."
(REUTERS)
To drink the most expensive wine in the world, you need to have a good checking account, and perhaps also a great love and fascination (with just a touch of madness) for this drink; after all, the priciest bottle in history was purchased for more than half a million dollars five years ago.
For those who can afford it, or who are simply curious, here is the list of the top five most expensive bottles ever sold.
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Everyone can access SSI payments when they retire, but the same is not the case for disabled Americans and SSDI payments. Aspects like work credits and definitions of disability make the process difficult and confusing, potentially preventing people who are eligible for the support from accessing it.
Indeed, a survey conducted by attorneys at Atticus, a law firm specializing in helping seniors access their benefits, has found that the vast majority of Americans do not know their rights with regard to SSDI payments.
Mortgage rates surge to 22-year high
Mortgage rates climbed higher above 7% this week, marking a 22-year high.
The average 30-year mortgage rate jumped to 7.23% this week, up from last week's 7.09%, according to Freddie Mac. That is the highest rate point since June 2001 when rates were at 7.24%.
Today's rate environment is hurting first-time homebuyers who are facing many other struggles, including high prices and lack of inventory. The incapacity to buy a home is also increasing the wealth gap between those who own and those who remain unable to acquire a house.
Fairfax County in the state of Virginia has launched the Economic Mobility Pilot program, which will provide monthly payments of $750 to 180 eligible families for 15 months.
The guaranteed income program has a total budget of $2 million, which was approved by the Board of Supervisors and will be funded by the American Rescue Act.
According to the parameters of the project, those who want to participate in the Fairfax County Economic Mobility Pilot will need to meet a set of requirements.
The White House launched its new plan to reduce monthly student loan repayments for borrowers which will also provide a shorter path to debt forgiveness.
Here's how to apply for the new program.
High mortgage rates cutting homebuyers’ purchasing power
Freddie Mac reported the weekly average for 30-year fixed-rate mortgages on Thursday which climbed for a fifth straight week. The latest average rate is now 7.23% for the week ending 24 August according to Freddie Mac data. However, daily rates have been approached 7.5% earlier this week.
The combination of high mortgage rates and high home prices has eaten into would-be homebuyers purchasing power. As Redfin points out, a homebuyer with a monthly budget of $3,000 can now only afford a $429,000 home compared to a $500,000 at the same time last year when mortgage rates were 5.5%.
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Each month, the SSA sends benefits to retired workers and survivors; that is, the children, spouses, widows, widowers, or parents of a deceased beneficiary.
The SSA also sends disability benefits from the Supplemental Security Income (SSI) program and Social Security Disability Insurance (SSDI).
Some recipients can receive up to $914 on Sept. 1. Find out if you are one of these beneficiaries, as well the full schedule for the month.
French winemakers are facing a blend of problems that has left them with an oversupply. The EU and France are allocating millions to destroy the excess.
Good morning and welcome to AS USA's live financial blog!
We will be bringing you the latest on SNAP benefits news, Social Security updates and student debt plans, as well as other financial news affecting US consumers as policymakers continue working to tame inflation.