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US financial news summary | 13 May 2023

Update:
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US Finance: Latest Updates

Rent for single-family homes on the rise

Amid an overall cooling of rent prices in the US, a study shows that single-family rentals are going up.

Monthly rental rates increased from $2,212 to $2,330 at the close of the first quarter of 2023 compared with the same period last year, which translates to a 5.3% increase. At the moment, demand for these kinds of homes outweigh supply.

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How will the new immigration law in Florida affect undocumented immigrants?

After being approved by the legislature, Florida governor Ron DeSantis signed a new immigration bill (S.B. 1718), which will adversely affect undocumented immigrants in the state starting July 1, when it officially goes into effect.

The new legislation will affect immigrants without documents in several aspects, and as this report tells us, this includes the labor field, health, their identification, and possible relocation.

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10 worst states to retire in

Personal finance website WalletHub ranked all 50 US states based on three key categories: affordability, quality of life and health care, to determine how good a state was for retirement living. Ranking was determined by how well the state scored across all three categories. 

According to these measures, these are the worst states to retire in: Kentucky, New Jersey, Mississippi, Oklahoma, New York, Louisiana, Illinois, Washington, Maryland, and Arkansas.

 

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What will Elon Musk’s role in Twitter be after the arrival of the new CEO?

On Thursday night, Elon Musk announced that he had hired a new CEO for Twitter who would take over his job in six weeks. On Friday, he finally revealed that his replacement would be Linda Yaccarino.

The billionaire will continue to play an active role in the social media platform. According to this report, he will become executive chair and chief technology officer, overseeing the product, software, and operating systems.

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Stock market dips as consumer sentiment drops to 6-month lows

Stocks ended slightly lower on Friday, led by weaker megacap shares following their recent rally, as data showed consumer sentiment dropped to a six-month low.

The Dow was barely lower in its fifth straight day of declines, the blue-chip index's longest losing streak in two months.

May consumer sentiment dropped to its lowest since November as a standoff to raise the federal government's borrowing cap added to worries about the economic outlook.

Investors are concerned that the Fed's aggressive interest rate hikes could push the economy into recession. Fed Governor Michelle Bowman said the Fed will probably need to raise rates further if inflation stays high.

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What could happen to Social Security payments if the debt ceiling is not raised?

Last week, Treasury Secretary Janet Yellen notified Congress that the US could default on its debt as early as June 1, which would have serious consequences on the economy.

The Congressional Budget Office has a similar prediction, warning that the country is at significant risk of defaulting on its debt in the first two weeks of June.

As our coverage details, this could have a big impact on Social Security.

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Thee credit market is tightening says Federal Reserve official

I will begin by offering a few thoughts on U.S. monetary policy. At our most recent meeting last week, in light of the ongoing unacceptably high inflation, the Federal Open Market Committee (FOMC) increased the target range for the federal funds rate by 25 basis points. With this increase, the FOMC has raised the federal funds rate by 5 percentage points since March of last year. These increases, combined with the runoff of our balance sheet, are having the desired effect of tightening financial conditions. In my view, our policy stance is now restrictive, but whether it is sufficiently restrictive to bring inflation down remains uncertain. Some signs of slowing in aggregate demand, lower numbers of job openings and more modest gross domestic product (GDP) growth indicate that we have moved into restrictive territory. But inflation remains much too high, and measures of core inflation have remained persistently elevated, with declining unemployment and ongoing wage growth. And, as senior loan officers signaled beginning last summer, credit has continued to tighten. I expect this trend will continue given increased bank funding costs and reduced levels of liquidity.

Michelle W. Bowman, Federal Reserve Governor

The changing food prices this year

According to figures from the United States Department of Agriculture, these were the foods that increased in price the most between April 2022 and April 2023:

Margarine: +23.8%

Eggs: +21.4%

Frozen vegetables: +18.9%

Flours and mixes of prepared flours: +17.8%

Cookies: +15.9%

Beef, veal and pork also rose considerably, although not to the level of the listed products. The fall in food inflation began to be noticed more significantly during the last quarter of 2022, especially in beef, pork and fresh fruits.

The indices that decreased the most from March to April include: oranges and mandarins (-3.8%), frankfurter sausages (-2.9%), citrus (-2.7%), bacon and related products (-2.2%) and fresh whole milk (-2.1%).

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Elon Musk says he will do a live Q and A on Twitter with the new CEO

Earlier this week, Elon Musk announced that he would be stepping aside as CEO of Twitter, naming NBCUniversal executive Linda Yaccarino as his successor. 

Musk told his followers that soon the duo would participate in some Twitter spaces to talk with users as the leadership transition begins. 

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Elon Musk steps down as head of Twitter: Who is Linda Yaccarino, his replacement?

Elon Musk has announced that he is stepping down as CEO of Twitter, and that he will be taking on other responsibilities in the social media platform. His replacement has been chosen.

“Excited to announce that I’ve hired a new CEO for X/Twitter. She will be starting in ~6 weeks! My role will transition to being exec chair & CTO, overseeing product, software & sysops,” he wrote in a Tweet on Thursday.

NBCUniversal executive Linda Yaccarino will become the company’s new CEO,.

Read more on Linda Yaccarino's background in our full coverage. 

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Job openings are in free fall: what could this mean for wages?

The number of job openings fell to 9.6 million in March, which is down over one million since December. The number of openings falling indicates that the demand for labor is falling, which could lead wages to fall as there are fewer jobs for those searching for one. Thus, workers looking for a new job have to compete for a shrinking number of openings. 

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IRS $900 refund: Who is it for and how to apply

In April, the IRS announced that nearly 1.5 million people nationwide were still eligible to receive a tax refund worth up to $900. But who? And who can it be claimed? We took a look...

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Debt ceiling risks cannot be overstated, says Yellen

The debt ceiling is the maximum amount the US government can spend on its existing financial obligations, such as Social Security and veterans’ wages, as well as Medicare or Medicaid.

Faced with a scenario in which the US government reaches said limit, Congress must increase or suspend that debt ceiling to avoid serious economic consequences. However, Congress has not reached an agreement.

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Hello and welcome to AS USA's live blog on financial news. We will bring you the latest from Wall Street to Washington for all you need to know about interest rates, the debt ceiling negotiations, inflation, and Social Security. 

On Wednesday, the Bureau of Labor Statistics reported that inflation increased 0.4 percent in April, leading to a year-over-year increase in prices of 4.9 percent. 

On Thursday, the Department of Labor reported that the number of initial unemployment claims made last week, 264,000, hit the highest level seen since October 2021. Meanwhile, unemployment remains at a historic low. 

The US Treasury has said that the country could hit its debt ceiling by 1 June, and still, no deal has been struck on an increase to the limit. Former president Donald Trump has told Republicans that they should allow the country to default if Democrats do not cave to their demands. 

Thanks for following along. 

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