US financial news summary | 2 September 2023
US Finance News
Headlines: Saturday 2 September 2023
- Employment report: 736,000 people enter job market, unemployment at 3.8%
- Job openings fell in July to a more than 2-year low, pointing to slowdown
- September SNAP benefits brought forward in Florida due to Hurricane Idalia
- US quarterly growth slower than expected in Q2
- Minimum wage in Florida set to increase in September
- Minimum wage in California to go up in 2024
- New requirements to receive SNAP benefits in 2024 to take effect soon
- 20% of student loan borrowers to pay $500 monthly when payments resume, according to study
A crucial aspect of the data is the focus on ‘nonfarm’ payrolls. Unsurprisingly, this does not count farm workers in the data.
Nonfarm payroll refers to the total number of paid workers in the US, though it excludes employees in the agricultural sector, nonprofit organizations, and government employees.
US employment data for August released
The latest data showed an increase in unemployment to 3.8 percent, the highest since February 2022 and nonfarm payrolls increased by 187,000.
The US monthly jobs report, is produced by the Bureau of Labor Statistics (BLS). This data provides institutions the information necessary to carry out certain actions, such as the Federal Reserve setting interest rates.
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The COLA is announced once the CPI-W data, corresponding to July, August and September, are available for calculation. The official COLA for 2024 will be announced in October this year.
The COLA would go into effect in December and would be applied for the first time in Social Security and SSI payments in January 2024.
These are the predictions for its size.
The US has a growing demographic timebomb. At the 2020 census the population stood at 331 million people, growing 7.4 percent since 2010. This was the slowest increase since the great depression and will be compounded by the aging population.
You would think that efforts would be made to address this issue, either with increased immigration or by making it cheaper for new parents to raise children.
On the contrary, the US has eye-wateringly expensive childcare.
The US childcare crisis
Come 30 September, child care support that was expanded during the covid-19 pandemic will end. An assessment by The Century Foundation, a non-partisan thinktank, states that 3.2 million children are set to lose child care with 70,000 programs ending.
The cutting to funding will mean higher costs for parents as well as a widening staff shortage. The industry is 40,000 workers short of its pandemic number as it is. The states which will be worst hit are Texas, New York, and Florida.
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The Supplemental Nutrition Assistance Program, formerly known as food stamps, is a federal program that, in coordination with state governments, provides benefits to low-income families to buy food.
This program is administered by each state, so some aspects of the benefits may vary, such as the program’s name. In the case of the state of California, SNAP is known as CalFresh. These payments are sent during the first 10 days of each month based on the last digit of each beneficiary's case number.
This is the California SNAP benefit payment schedule for September 2023:
Finding affordable housing in the United States has been getting harder with a tight housing market pushing up prices across the country. Those who are renting are feeling the pinch too.
There is assistance available for very-low-income families, the elderly, and the disabled through the Section 8 Housing Choice Voucher program to afford decent, safe, and sanitary housing.
S&P 500 ends higher as jobs data fuels hopes of rate hike pause
The S&P 500 ended higher after a jump in unemployment cemented expectations of a pause in interest rate hikes this month, while shares of streaming firms tumbled due to a rate dispute between Disney and Charter Communications.
The Labor Department's report showed the August unemployment rate rose to 3.8% while wage growth slowed. Non-farm payrolls rose more than expected, though data for July was revised lower to 157,000 job additions.
SNAP is one of the main nutritional benefits provided by the United States Department of Agriculture in collaboration with state governments. This program provides financial assistance to low-income families for the purchase of certain foods.
The monthly allowance provided by the program depends on the size of the household, as well as its gross and net income and other requirements. The maximum amounts that beneficiaries can receive change each year, coming into effect on October 1.
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The United States Department of Labor’s unemployment insurance programs provide benefits to workers who have lost their jobs provided they meet certain eligibility requirements.
Unemployment Insurance is a joint state and federal program that provides cash benefits to qualified workers. Each state administers its own separate program. However, they all follow certain guidelines established by federal law.
Unemployment rate jumps to 3.8%
Job growth picked up in August, but the unemployment rate jumped to 3.8% and wage gains moderated, suggesting that labor market conditions were easing and cementing expectations that the Federal Reserve will not raise interest rates this month.
The closely watched employment report from the Labor Department on Friday also showed 736,000 people entered the job market last month, boosting the participation rate to the highest level in 3-1/2 years. Concerns about an economic slowdown are probably luring people back into the labor market.
If you are looking to upgrade to a new car and intend to sell your old ride, the upcoming Labor Day weekend would be the best time to make a listing for it.
According to automotive research and sales site CarGurus, the ideal time to sell or trade in your car would be just after Labor Day. This was not the case in the past, when April was the time you would get the highest price for your car. According to data from the car buy-and-sell website, the pandemic caused this shift in 2020.
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The United States Department of Labor has launched a new proposal where nearly three million workers would have the right to receive overtime pay when they work more than 40 hours a week.
Through the measure, the Biden Administration intends to extend the protection of time-and-a-half pay to a greater number of workers through the modification of the exemptions of the Reasonable Labor Standards Act.
What does the SAVE plan do?
The student debt repayment plan would increase the amount of income protected from repayment from 150% of the Federal poverty guidelines to 225%.
Undergraduate loans will have their monthly repayments cut in half from 10% to 5% of discretionary income. Interest is also capped.
September 1 is the day all people with students debts have been dreading; mandatory monthly loan repayments have now resumed. The moratorium in place since the beginning of the covid-19 pandemic has ended.
The Biden Administration has put forward the SAVE plan; an income-driven repayment plan. It has been touted as the “most affordable repayment plan ever”, but that isn’t true for all borrowers.
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Recipients of Supplemental Security Income (SSI) will receive two payments in September. Those people who receive their Social Security payments, whether retirees, survivors or through SSDI, and are eligible for SSI also receive two payments.
SSI payments are sent on the first day of each month. However, if the first day is Saturday or Sunday, payments are sent forward to the last Friday of the previous month.
What is 'quiet cutting?'
“Quiet cutting”, as it has been called, is a process in which companies aim to get workers out without firing them.
Restructuring of workforces, simply eliminating your job and moving people around sectors, often for lower pay, are examples of this.
Good morning and welcome to AS USA's live financial blog!
As September begins, follow along as we bring you the latest news on SNAP benefits, Social Security updates, and student loan repayment plans.
We'll also be reporting on other financial news affecting US consumers as the job market cools, consumers ramp up spending, and the government continues working to bring down inflation.