US financial news summary | 30 August 2023
Headlines: Wednesday 30 August 2023
- 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
US quarterly growth slower than expected in Q2
On Wednesday, the Commerce Department revised its assessment, indicating that the US economy grew by 2.1 percent during the second quarter.
This figure represents a slight decrease from its initial projection of 2.4 percent and a modest improvement compared to the first quarter's 2 percent annualized growth rate.
It is likely that the rising interest rates played a role in the slowdown.
As a result of the Inflation Reduction Act passed by Congress last year, the Medicare program was given extra powers. At present, the country’s largest healthcare provider cannot negotiate the price of drugs it purchases, leaving prices at the whim of drug providers.
It will have this power from 2026, reducing costs for patients due to the immense power it will wield. The program aims to save $25 billion per year on drug prices by 2031.
Could the US be set to ease marajuana restrictions?
Shares in two of the biggest marijuana companies, Tilray Brands and Canopy Growth Corporation, increased by 10 per cent and 13 per cent respectively in early afternoon trading with the news that the US could ease restrictions on the herb.
Every year the Social Security Administration announces its COLA increase after the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September of the year is released. This year that will happen at 8:30 am ET on Thursday 12 October 2023.
The annual COLA is calculated measuring inflation across a wide variety of goods and services. When making the calculation, the Social Security Administration only uses the third quarter of each year to calculate the COLA for the following year. The agency rounds to the nearest tenth of a percent.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/CAMZDKBOMHJZKGBIESZPV5CWQY.jpg)
The minimum wage in the US is $7.50 per hour. Base salary has not increased in about 14 years, marking the longest period without an increase since the minimum salary rate was created in 1938.
Although the federal minimum wage has remained unchanged for more than 10 years, 30 states have set higher wages, including California.
Currently, the standard minimum wage in California is $15.50 per hour, one of the highest in the country, behind only the District of Columbia and Washington state.
The minimum wage in the Golden State is already one of the highest and it will continue to rise next year.
Hollywood strikes to cost US economy more than $5 billion
The ongoing double strike in Hollywood hit a stalemate after the Writers Guild of America slammed the studios' counterproposal, which they said didn't come close to satisfying their demands, per Yahoo Finance.
The writers' strike prepares to enter its fifth month while the actors' strike heads for month two. Industry watchers say that the "double whammy" work stoppage has already had serious economic implications, similar to the last writers' strike 16 years ago.
According to estimates from the Los Angeles County Economic Development Corp., the 2007-2008 strike cost the LA County economy a whopping $2.5 billion. That likely will double this time around.
The Social Security Administration has finished mailing out August payments and is preparing for the September benefit mailing.
Every month, SSA sends benefits to retired workers, as well as survivor payments, which are sent to the children, spouses, widows, widowers, or parents of a deceased beneficiary.
SSA also sends disability benefits from the Supplemental Security Income program and Social Security Disability Insurance.
Learn which Social Security beneficiaries will receive payments of more than $1,800 up to $4,555 as a new month begins on Friday, September 1.
/cloudfront-eu-central-1.images.arcpublishing.com/diarioas/YPR7NKNNXZOMPFBPWLHSLJAJ7A.jpg)
President Joe Biden signed the Fiscal Responsibility Act into law in June, and one of the most salient points of the measure was the change in work requirements for some recipients of the Supplemental Nutrition Assistance Program.
As the program currently stands, there are already work requirements in place for most able-bodied adults without dependents, or ABAWD, from the ages of 18 to 49.
The modifications will begin on Thursday, Sept. 1, 2023, although the new policies will be implemented gradually.will
Americans must save for a longer lifespan
If you have reached age 65 and are reading this, you are likely going to live a lot longer than you realize.
The bad news is that you obviously will require money to do so – and you might have to revise your retirement calculations upward.
That is the finding of a new report from TIAA Institute and the Global Financial Literacy Excellence Center, which has discovered that our collective “longevity literacy” – our grasp of how long we are going to be around – is very bad indeed.
If you get to 65, you are no longer looking at population-wide longevity averages, which are currently around 76.1 years, according to the Centers for Disease Control and Prevention.
That is because you have already outlasted scores of people who did not make it that far. Over time, the averages shift: Men who make it to 65 can expect to live to 84, while women are looking at an even longer runway to 87.
(REUTERS)
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 federal government, through the Department of Agriculture (USDA), implements several nutritional programs. The best known is the Supplemental Nutrition Assistance Program (SNAP), but there is another one called the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
What are your repayment options for student loans?
The SAVE plan aims to lower monthly payments for borrowers and eliminate them entirely for individuals who meet the income criteria. It will also halt the accumulation of unpaid interest as long as repayments are made promptly.
You simply have to be enrolled in an Income Driven Repayment plan for paying back your student debt.
Was your application for the Supplemental Nutrition Assistance Program (SNAP) denied? If so, you can appeal the decision in certain situations.
After being extended multiple times, the student debt moratorium is coming to an end. Payments are resuming on 1 September and interest will be accrued once more.
If you have not enrolled in the SAVE plan then payments will resume as they were at the beginning of 2020. Contact your student loan servicer to find out what you could expect to have to pay.
Good morning and welcome to AS USA's live financial blog!
Follow along as we bring you the latest news on SNAP benefits, Social Security updates and student debt plans, as well as other financial news affecting US consumers as policymakers continue working to tame inflation.