US financial news | Summary news 24 August
US financial news: live updates
Headlines: Thursday 24 August 2023
- Wall Street makes big gains on expectations of Nvidia quarterly results
- 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
- Teamsters members ratify new contract with UPS avoiding crippling strike
-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
- 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
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The end of August is just a week away but the Social Security Administration is still working through this month's payments while preparing for the September payment mailing.
Alongside the most widely-received payments, the retirement benefits, the agency sends disability benefits too. These include the Supplemental Security Income (SSI) program and Social Security Disability Insurance (SSDI).
Sometimes the monthly payment schedule falls in a way that means that recipients will receive two checks in a single month. For some people, September will be a two-check month...
What will Federal Reserve chair Jerome Powell say on Friday?
As the United States economy continues to experience relentless growth Jerome Powell, Chair of the Federal Reserve, will give a speech outlining the central bank's take on the economic outlook. After consistent interest rate hikes, there is a sense that the Fed may be approaching the end of its inflation-busting measures.
Trump tariffs could hurt US economy
You may have noticed that the Republican presidential candidates are starting to up the ante ahead of the 2024 elections, with one man leading the way in the polls. But with that in mind, the White House issued a statement on Wednesday expressing concern over former President Donald Trump's proposal to implement new tariffs on all foreign imports, asserting that such a move would adversely affect American working families, disrupt the economy, and contribute to inflation.
According to reports, Trump convened a meeting with his key economic advisors at his private golf club in New Jersey last Wednesday, dedicating two hours to outline an economic plan with a focus on trade for his potential 2024 presidential campaign. This initiative was detailed in an article by the Washington Post on Tuesday.
During the meeting, one of the proposals discussed was Trump's intention to establish a comprehensive baseline tariff on nearly all imports to the United States, should he be reelected, as outlined in the report.
In response to these developments, White House spokesperson Andrew Bates remarked, "Combining a sweeping tariff tax on the middle class with more trickle-down tax welfare for rich special interests would stifle economic growth and fuel inflation,"
Bates emphasized that President Biden is firmly opposed to such a strategy, citing concerns that it would result in elevated prices and increased inflation. The Biden administration remains committed to collaborating with international allies to address "trade abuses committed by countries like China."
Social security and a future with AI
One of the pillars of Social Security is that most of it is funded through payroll taxes, meaning that the program is self-sustaining. Workers, employers and independent contractors all contribute taxes to Social Security, and those taxes pay benefits for current Social Security recipients.
This system works best in periods of low unemployment because more workers equal more tax funding.
But if a large number of workers are suddenly replaced by ChatGPT and other types of artificial intelligence, Social Security could be in trouble.
Vance Cariaga asks whether AI could push SS into insolvency faster.
Study highlights food insufficiency after SNAP discontinuance
Comparing trends in food insufficiency in states that ended emergency allotments before the federal government ended them altogether in March 2023 with the rest of the U.S., the researchers found that after the temporary increases to households’ SNAP benefits ended, SNAP recipients experienced a 21% relative increase in both food insufficiency and food insufficiency among children.
These findings imply that more than two million more American households faced food insufficiency when emergency allotments ended in all states.
Tips to help you follow valuable money lessons
Looking for a "valuable money lesson"? Well, you've come to the right place.
Most Americans say the learned it at a young age, but a whopping 84% say that don't actually stick to it. It probably won't come as too much of a surprise to learn than the "it" is budgeting and tracking expenses, but why are we so bad at it?
Here are a few tips that can make sure you are part of the 16% that do it.
Going to college, or paying for your child to go to college, is not cheap. That, in fact, is probably quite the understatement. 529 plans, however, are tax-advantaged savings plans in the United States designed to help individuals and families save for education expenses.
There are two types of 529 plans - college savings plans and prepaid tuition plans - both of which could get you out of a financial muddle.
Here's Oliver to explain the difference between the two and how they work.
USPS losing money, threatening retiree benefits
The US Postal Service has been losing money, and if they can’t get back on track, that could threaten its ability to deliver the mail and pay its retirees’ benefits.
According to a federal watchdog group, expenses have grown faster than revenues for years partly because of the drop in first-class mail, its most profitable product. USPS also faces competition for package delivery from private companies while key costs, such as employee compensation, have continued to rise.
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Gender often plays a role when it comes to the premiums that a motorist has to pay for car insurance.
According to Value Penguin, a personal finance website, most states allow car insurance companies to consider gender when setting rates for premiums.
Generally, women pay less than men for car insurance, but the disparity depends on age.
T-Mobile to slash 5,000 jobs
T-Mobile said it would reduce its workforce by cutting 5,000 jobs in the US as the wireless carrier deals with rising costs related to attracting more subscribers in a competitive market.
The carrier has been taking the lion’s share of subscribers looking for cheaper plans in the last three quarters through discounted bundles, but that has taken a toll on the company.
The jobs cuts will take place over the next five weeks and will target corporate and back-office roles, and some technology jobs.
The price of bacon usually spikes during the summer season due to the popularity of the bacon, lettuce, and tomato (BLT) sandwich, which is widely consumed during tomato harvest time. Pork belly prices usually shoot up in July and August, but this year prices are nearing record highs.
Aside from increased seasonal demand, the price hike is caused in part by the implementation of an animal welfare law in California that took effect on July 1.
Walmart pulls ahead of competitors in grocery industry
Walmart has widened its lead as the most dominant player in the grocery business.
The retail giant expanded its market share during the second quarter, recording high single-digit growth in its quarterly results. As Walmart pulls away and its power and influence over the industry grows stronger, competitors would need to merge to be able to compete.
The grocery business is going through a "revolution," and Walmart is "unstoppable," Burt Flickinger, managing director of consulting firm Strategic Resource Group, told Yahoo Finance.
The United States has various financial aid programs for low-income people. In some cases, the relief is distributed at the federal level, while in others at the state level, depending on the budget of each government.
In the state of Texas, there is a budget of $20.5 million to make the program Uplift a reality. Through this, monthly payments of $500 dollars will be offered for a period of 18 months, resulting in income of up to $9,000 dollars for the beneficiaries.
Here’s who will receive the money and requirements to request it.
E-cigarette maker Juul to lay off 30% of workforce
Juul Labs is planning to lay off 30% of its workforce, as the e-cigarettes maker aims to reduce its operating costs.
The restructuring is aimed at maximizing profitability and cash-flow generation, the company said in a statement, adding that it would substantially reduce its headcount to deliver on the company's strategy.
The e-cigarettes maker joins several companies across corporate America that have trimmed their workforce this year in a bid to rein in costs amid still-high inflation and rising interest rates.
Existing-home sales fell in July, prices rose year-over-year
The National Association of Realtors reported on Tuesday that sales of existing homes fell in July by 2.2% nationwide, down 16.6% year-over-year. Sales were down from 12 months prior in all four regions, only in the West did sales increase in July.
“Two factors are driving current sales activity – inventory availability and mortgage rates. Unfortunately, both have been unfavorable to buyers,” said NAR Chief Economist Lawrence Yun.
Meanwhile, the median sale price for all types of homes, $406,700, increased 1.9% last month compared to the same time last year. Prices were unchanged in the West but rose in Northeast, Midwest and South.
What are SNAP coupons?
One noteworthy program is the Supplemental Nutrition Assistance Program, popularly known as SNAP coupons.
Through this program, monthly coupons are provided to families in need who are struggling to put food on their tables. The amount depends on the situation of each family, especially on the number of household members.
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To receive SNAP benefits, it is necessary to meet certain requirements such as meeting gross and net income limits, resources, among others. Despite being a federal scheme, each state administers its program, and the requirements may vary in different areas.
The Food and Nutrition Service of the United States Department of Agriculture establishes certain general criteria, which usually change each year, taking effect each October. Benefit amounts also change annually.
After the Fiscal Responsibility Act of 2023 was signed into law, some requirements to be able to receive SNAP benefits have changed and will go into effect very soon.
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Bearing in mind that the deposit of the coupons is under the administration of state governments, below are the payment dates of SNAP benefits in August for each state of the country.
Wall Street gets a boost on expectations of Nvidia earnings from AI boom
All three major Wall Street indexes saw sharp gains on Wednesday ahead of Nvidia announcing earnings results for the second quarter. The Dow was up 0.54%, S&P 500 gained 1.1% and the Nasdaq jumped 1.59%.
The company, whose chips are widely used for artificial intelligence (AI) computing, reports after the closing bell that revenue hit a record $13.5 billion in the Q2, up 101% from a year ago. Revenue from data centers was up 171% year-on-year at $10.32 billion. Prior to markets closing its share value rose 3.2%, jumping another 9% in aftermarket trading. Nvidia's stock is up more than 220% for the year so far.
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.
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.
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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 specialising in helping seniors access their benefits, has found that the vast majority of Americans do not know their rights with regard to SSDI payments.
With storms battering parts of the US, some homes are likely to be damaged by strong winds and floodwaters. Fixing up a home is stressful enough, but this can be compounded by the hassle of dealing with insurance companies in the process of repairing whatever has been destroyed.
While this task can be challenging, following some pointers can increase the chances of receiving a fair settlement to repair the damage to a home.
The vast majority of American households lack flood insurance despite the risk being present in all 50 states and increasing as the climate changes. When water inundates a property, those without flood insurance can expect hefty out-of-pocket costs to clean up and repair as regular homeowner's insurance does not cover flood damage.
The cost of acquiring flood insurance pales in comparison to the costly damage that just an inch of water in your home can cause.
Teamster members ratify new contract with UPS avoiding strike
Over 86% of rank-and-file UPS Teamster members voted to ratify a new five-year contract with the shipping company. Details of the agreement were hammered out just days before workers were set to strike 1 August, however, until it was ratified by union members the specter of industrial action remained.
The new contract will give an $2.75 per hour across-the-board pay rise to workers applied retroactively to 1 August. Full-time workers will get a minimum hourly $7.50 rise over the life of the contract. It also addresses drivers’ complaints about a lack of air conditioning in roughly 95,000 delivery trucks.
A week prior to striking on 1 August, the International Brotherhood of Teamsters reached an agreement with UPS on over 60 changes and improvements to the national master agreement.
On Thursday, an overwhelming majority of the rank-and-file members ratified the new five-year contract which the union is touting as “the most historic collective bargaining agreement in the history of UPS.”
The UPS Teamsters' contract with the package delivery company will see pay increases across the board.
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 work to tame inflation.